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Banking licence: preparing a bank for authorisation

A bank licence is a long, capital-intensive project in which the regulator assesses shareholders, business model, capital plan and control environment as a whole. Our team prepares the application and the operating framework behind it — business plan and financial model, governance, risk and AML frameworks, IT and regulatory reporting readiness — and, together with local counsel, supports the dialogue with the supervisor.

EU · UK · CHAIFCLicence
The regime

What a banking licence covers

A bank — in EU terms a credit institution — is a company authorised to take deposits or other repayable funds from the public and to grant credit for its own account. Because it works with depositors' money, banking is the most closely supervised part of the financial sector: the regulator examines who owns and controls the bank, how much capital is committed, how risks are measured and limited, and whether management can run the bank safely from the first day.

Several jurisdictions offer narrower entry routes: a specialised bank in Lithuania, the Swiss FinTech licence for deposit-taking without lending, a mobilisation phase with restricted deposit-taking in the United Kingdom, and separate permissions for Accepting Deposits and Providing Credit in the Astana International Financial Centre (AIFC). The choice between them determines capital, timeline and the business the bank may conduct.

A banking licence differs from a payment institution or electronic money institution authorisation: those firms hold client funds but may not use them for lending. If the model does not require deposit-taking or own-account lending, a lighter regime may be sufficient — this is the first question we answer.

Who this is for

  • Digital banks planning to hold customer deposits and lend
  • Payment and e-money institutions moving to a deposit-taking model
  • Specialised lenders — SME, trade or consumer finance — seeking a stable deposit base
  • Financial groups establishing a subsidiary bank in the EU, the UK or Switzerland
  • FinTech companies that need to hold client funds beyond the limits of payment regimes
  • Projects considering the AIFC deposit-taking or credit-provider permissions
  • Lenders in Kazakhstan assessing a transition to a bank under the new banking law
Scope

Scope of a bank licence

What it permits

  • Accepting deposits and other repayable funds from the public
  • Granting loans and other credit for own account
  • Opening and maintaining customer accounts
  • Payment services and payment instruments, within the licence and local law
  • Other banking and ancillary services listed in the licence

Restrictions

  • Activities outside the licence require separate permission; a specialised bank works within an exhaustive list
  • Initial capital must be paid in before the licence is granted, and own funds must be maintained at all times
  • Qualifying shareholders and changes of control require prior regulatory approval
  • Management body members are assessed for fitness and propriety before appointment
  • Prudential ratios and regulatory reporting apply from the first day of operation
  • Swiss FinTech licence: deposits may not be invested or bear interest and are not covered by deposit insurance
  • UK mobilisation: deposits capped at £50,000 until restrictions are lifted
Jurisdictions

Jurisdictions and regimes

The table shows regimes for which the key parameters have been checked against official sources. Capital figures are statutory minimums; the amount a regulator expects to see in the capital plan is usually higher.

JurisdictionRegulatorRegimeKey points
EU — euro area (e.g. Lithuania, Estonia, Cyprus, Malta)European Central Bank (ECB); national competent authority as entry pointLicence (credit institution)Minimum initial capital €5 million under the Capital Requirements Directive (CRD). The application is filed with the national authority, which assesses it together with the ECB; the ECB grants or refuses the licence.
LithuaniaBank of Lithuania; ECBLicence (bank or specialised bank)Specialised bank: initial capital €1 million, activities limited to an exhaustive statutory list (no investment services). Decision within 6 months of a complete application, at most 12 months.
Czech Republic, PolandCzech National Bank; Polish Financial Supervision Authority (KNF)Licence (credit institution)Outside the euro area, the national authority licenses banks itself. The EU minimum initial capital applies.
United KingdomPrudential Regulation Authority (PRA) and Financial Conduct Authority (FCA)Authorisation (dual regulation)The PRA is responsible for prudential supervision and the FCA for conduct. A new bank may start in mobilisation: authorisation with restrictions for up to 12 months, deposits capped at £50,000, lower capital during the phase.
Switzerland — bankFINMALicenceFully paid-in minimum capital of at least CHF 10 million; capital, liquidity and management requirements, with the bank managed from Switzerland.
Switzerland — FinTech licenceFINMALicence (Art. 1b Banking Act)Public deposits up to CHF 100 million or crypto-assets in collective custody; deposits not invested and not interest-bearing; Swiss AG, KmAG or GmbH; no deposit insurance. Capital depends on deposits taken, with a fixed floor — confirmed at assessment.
AIFC (Kazakhstan)Astana Financial Services Authority (AFSA)Authorisation (licence)Accepting Deposits: base capital USD 10 million. Providing Credit: USD 2 million. Process: pre-application meeting, draft regulatory business plan, application, in-principle approval with conditions, licence.
Kazakhstan — national regimeAgency for Regulation and Development of the Financial Market (ARDFM)LicenceA new Law on banks and banking activity entered into force in 2026 and revised the licence structure. Licence types and minimum capital are confirmed against the current official texts during the assessment.
KyrgyzstanNational Bank of the Kyrgyz Republic (NBKR)LicenceMinimum charter capital for new banks, including branches of foreign banks: KGS 3 billion (NBKR resolution of 29 December 2025). Existing banks raise capital in stages from KGS 1 billion on 1 July 2026 to KGS 3 billion by 1 July 2030; systemically important banks need KGS 8 billion from 1 July 2027.
GeorgiaNational Bank of Georgia (NBG)Licence (commercial bank; microbank)Commercial bank: regulatory capital of GEL 50 million (NBG Order No. 61/04 of 3 May 2017); the NBG indicates a review period of up to 6 months, and in practice timing depends on the quality of the application. Microbank (since 2023): regulatory capital of GEL 10 million. Licensing fees are paid separately from capital.

How jurisdictions differ

  • Who decides: in the euro area the ECB grants every bank licence on the basis of the national authority's assessment; in the Czech Republic and Poland the national authority decides; in the UK two regulators assess the bank in parallel.
  • Entry routes: the UK offers mobilisation with restricted deposit-taking; Lithuania offers a specialised bank with lower capital and a narrower scope; Switzerland offers a FinTech licence for deposit-taking without lending.
  • Capital: statutory minimums range from €1 million for a Lithuanian specialised bank and €5 million for an EU credit institution to CHF 10 million for a Swiss bank and USD 10 million for an AIFC deposit-taker — before buffers and start-up losses.
  • Kazakhstan: the AIFC regime (AFSA) and the national regime (ARDFM) are separate legal frameworks with different rules, supervisors and client perimeters; the choice is made at the start of the project.
  • Reform: Switzerland has consulted on replacing the FinTech licence with a new payment instrument institution category; as of October 2026 the change had not been enacted.
  • Central Asia and the Caucasus: Kyrgyzstan requires KGS 3 billion of charter capital for a new bank, with existing banks phased in by 2030; Georgia requires GEL 50 million of regulatory capital for a commercial bank and GEL 10 million for a microbank.
Requirements

Key requirements

Company and owners

  • Legal entity of a permitted form, incorporated in the licensing state
  • Transparent ownership chain up to ultimate beneficial owners
  • Qualifying shareholders assessed for reputation, financial soundness and source of funds
  • Group structure that allows effective supervision

Capital and finances

  • Initial capital of at least the statutory minimum, paid in before the licence is granted
  • Capital plan covering prudential ratios, buffers and start-up losses over the plan horizon
  • Liquidity and funding plan with stress scenarios
  • Evidence that shareholders can provide additional capital if needed

Management, team and local presence

  • Management body and key function holders meeting fit-and-proper requirements
  • Independent risk management, compliance and internal audit functions
  • Office, decision-making and staff in the licensing state
  • Board committees and governance proportionate to size and risk

Compliance and IT

  • AML/CFT (anti-money laundering and counter-terrorist financing) framework: risk assessment, customer due diligence, sanctions screening, transaction monitoring
  • Core banking, payment and reporting systems sized for the business plan
  • Capability to produce prudential and statistical reports
  • Information security, outsourcing and business continuity arrangements

Regulatory capital is separate from state and application fees, operating costs and our fees. Our fees are agreed after the project assessment.

Documents

Main application documents

  • Application form and cover letter to the competent authority
  • Regulatory business plan with a multi-year financial model
  • Capital plan and internal assessment of capital and liquidity adequacy
  • Ownership structure chart and files on qualifying shareholders
  • Fit-and-proper questionnaires and CVs of directors and key function holders
  • Governance documents: articles, board and committee terms of reference
  • Risk management framework and risk appetite statement
  • AML/CFT policy, business-wide risk assessment and procedures
  • IT architecture, information security and outsourcing documentation
  • Recovery, business continuity and exit plans
  • Evidence of the source of funds for the initial capital
Process

How the project runs

  1. 01

    Feasibility and regime choice

    We test the model against bank and non-bank regimes, compare jurisdictions and estimate capital and running costs. Result: a reasoned choice of regime and a project plan.

  2. 02

    Pre-application dialogue

    Meetings with the regulator to present the business model and agree the scope of the application. Result: a clear understanding of the regulator's expectations before drafting begins.

  3. 03

    Application package

    Business plan, financial model, capital plan, governance, risk, AML and IT documentation, shareholder and management files. Result: a complete and consistent application.

  4. 04

    Assessment

    Regulator questions, management interviews, document revisions. Result: timely answers and an updated package.

  5. 05

    Conditions and capital

    Capital paid in, key staff hired, systems tested; in the UK, the mobilisation phase. Result: readiness for full operation.

  6. 06

    Licence and launch

    Licence granted or restrictions lifted, operations launched with reporting in place. Result: a bank operating within its licence.

Timing

Timeline

In the euro area, as published by the Bank of Lithuania, the decision on a bank licence is taken within 6 months of a complete application and in any case within 12 months; in the UK a new bank may spend up to 12 months in mobilisation. In practice a bank project takes considerably longer than the formal review: preparation, the completeness check, regulator questions and capital raising all add time, and no regulator commits to a decision date.

  • Maturity of the business model and financial model
  • Complexity and transparency of the ownership structure
  • Availability of committed capital and evidence of its source
  • Recruitment of qualified management and key function holders
  • Readiness of core banking, reporting and security systems
  • Number of question rounds and the regulator's workload
Our work

What our team does

Lawyers

  • Perimeter analysis: bank, specialised bank or a non-bank alternative
  • Comparison of jurisdictions and licence types for the business model
  • Corporate structuring, incorporation and shareholder documentation
  • Governance framework: articles, board and committee documents, policies
  • Preparation of the application and support of the regulator dialogue
  • Foreign-law questions resolved together with local counsel

Finance specialists

  • Business plan and multi-year financial model
  • Capital planning: initial capital, prudential ratios, buffers, start-up losses
  • Liquidity and funding plan with stress scenarios
  • Project budget separating regulatory capital, state fees and operating costs
  • Preparation of source-of-funds evidence for the capital

AML/compliance specialists

  • Business-wide AML/CFT risk assessment
  • KYC/KYB, sanctions and PEP (politically exposed person) screening, and transaction monitoring procedures
  • Suspicious activity handling, internal control and training programme
  • Support for the bank's appointed MLRO (money laundering reporting officer) and inspection readiness
  • Integration of AML into the bank's risk management framework

Engineers

  • Requirements for core banking, payment and AML systems
  • Data model and processes for regulatory reporting
  • Information security and business continuity documentation
  • Development and integration of software aligned with regulatory requirements
  • Assessment of outsourcing and technology vendors
After authorisation

After the licence

  • Maintaining capital and liquidity ratios and reporting them to the regulator
  • Regular prudential, statistical and AML reporting
  • Prior approval of changes in qualifying holdings and management
  • External audit and supervisory reviews
  • Annual update of policies, risk assessments and recovery plans
  • Exit from mobilisation, or extension of the licence as the business grows
  • Responding to supervisory requests and inspections
FAQ

Frequently asked questions

Describe your project in a few sentences. We will give you a substantive reply: which questions need answering and where to start.

Discuss your project
Do we need a bank licence, or is a payment or e-money licence enough?

If the business only holds client funds to execute payments or issue e-money, a payment or e-money institution is usually the appropriate regime. A bank licence is needed when deposits are taken and used for lending on own account. We assess this first, because the difference in capital and timeline is substantial.

How much capital is required?

Statutory minimums range from €1 million for a Lithuanian specialised bank and €5 million for an EU credit institution to CHF 10 million in Switzerland and USD 10 million for an AIFC deposit-taker. The actual need is higher: the regulator expects capital to cover prudential ratios, buffers and losses in the first years. We calculate it in the capital plan; regulatory capital is separate from state fees, operating costs and our fees.

How long does it take?

In the euro area the decision period is 6 months from a complete application, at most 12 months, but preparation and the completeness check come first. A bank project should be planned with a substantial horizon; we give a realistic schedule after assessing the model, the shareholders and the capital.

What is the UK mobilisation phase?

A new bank may be authorised with restrictions for up to 12 months while it completes its build-out; deposits are capped at £50,000 during this period, and capital may be lower than at full operation. The application to exit mobilisation is made at least three months before the period ends.

Is the Swiss FinTech licence a bank licence?

It is a licence under the Swiss Banking Act for public deposits up to CHF 100 million or crypto-assets in collective custody, but the deposits may not be invested or bear interest and are not covered by deposit insurance. It suits models that hold funds without lending. A reform replacing it with a new category was under consultation and had not been enacted as of October 2026.

Which regime should we use in Kazakhstan — AIFC or national?

A bank can be authorised in the AIFC by AFSA (Accepting Deposits, Providing Credit) or licensed in the national regime by ARDFM. These are separate regimes with different law, supervisors and client perimeters. The national banking law was replaced by a new law in 2026; we confirm current licence types and capital against the official texts during assessment.

Can you guarantee the licence?

No. The decision belongs to the regulator, and no adviser can promise a licence or a decision date. We prepare the project so that the application is complete, consistent and supported by a realistic capital plan, and we support the dialogue until the decision.

Sources checked on 15 October 2026
  • Bank of Lithuania — Authorisation of banks (CRD initial capital EUR 5m; ECB as licensing authority; 6/12-month decision period; specialised bank EUR 1m) — https://www.lb.lt/en/authorisation-of-banks (checked 15 Oct 2026)
  • Bank of England, Prudential Regulation Authority — New Bank Start-up Unit: mobilisation — https://www.bankofengland.co.uk/prudential-regulation/new-bank-start-up-unit/mobilisation (checked 15 Oct 2026)
  • FINMA — Banks: getting licensed (minimum capital CHF 10m) — https://www.finma.ch/en/authorisation/banks-and-securities-firms/getting-licensed/banks/ (checked 15 Oct 2026)
  • FINMA — FinTech licence (Art. 1b Banking Act) — https://www.finma.ch/bewilligung/fintech/fintech-bewilligung (checked 15 Oct 2026)
  • Swiss Federal Council — consultation on amendments to the Financial Institutions Act (payment instrument institution, crypto institution) — https://www.admin.ch/en/newnsb/x4TMWQ1SWofNoFx7XyHhY (checked 15 Oct 2026)
  • AFSA — AIFC Banking Business Prudential Rules, base capital for Accepting Deposits and Providing Credit — https://afsa.aifc.kz (checked 15 Oct 2026)
  • AFSA — Guide on the Authorisation Process — https://afsa.aifc.kz/files/pages/2134/docs/10/guide-on-the-authorisation-process_.pdf (checked 15 Oct 2026)
  • NBKR Board resolution No. 2025-П-17/71-2-(НПА) of 29 Dec 2025 (minimum charter capital of banks) — https://www.nbkr.kg/contout.jsp?item=2145&lang=RUS&material=129713 (checked 15 Oct 2026)
  • NBG — Licensing requirements for commercial banks — https://nbg.gov.ge/en/page/licensing-requirements (checked 15 Oct 2026)
  • NBG — Licensing requirements for microbanks — https://nbg.gov.ge/en/page/licensing-requiremen-1 (checked 15 Oct 2026)

Assess your bank project

Send us a short description of the business model, target markets and shareholders. We will confirm whether a bank licence is needed, which regime fits and what capital, team and timeline the project requires. Our fees are agreed after this assessment.

Discuss your project
Contact

Tell us about your project

We will review the description and give you a substantive reply: which regime may apply and where to start.

Prefer e-mail? Write to us directly.info@paralex.kz

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