A banking license is a legal prerequisite for financial institutions that want to run a banking business. Under the law in most jurisdictions, businesses are not permitted to carry words such as bank , insurance , national in their name, unless holding the appropriate license. Depending on their banking regulations, jurisdictions may offer different types of banking licenses, such as
- complete banking license for general banking activities, such as taking deposits from the general public
- international banking license (offshore banking license), which prohibits any local business activity
- non-bank financial institutions (NBFI) are institutions that provide financial services but must comply with fewer regulations than full banking licenses.
Video Banking license
License publishing
Licenses are usually issued by national banking regulators for applicant companies that meet their banking requirements. Requirements may include minimum capital requirements, minimum number of directors, shareholder residence, share ownership spread, profitable shareholder disclosure, other than other matters. These requirements may vary between jurisdictions, and may differ depending on the type of license sought. Some jurisdictions, sometimes called tax havens, have a reputation for loose or corrupt standards in bank licensing, licensing, for example, for shell companies, or to companies with nominee directors, or with dummy shareholders, etc.
Licensing may involve lengthy, complicated and expensive procedures, which may depend on the type of bank permit sought. There are a number of sectors where banks can be involved. Commercial bank licenses allow banks to engage in all banking activities, such as retail banking, acquiring traders, cash management, asset management and trading. An applicant may apply for a limited banking license, such as an offshore banking license.
Maps Banking license
Banking license in the United States
Most state legislatures in the United States prohibit public companies from accepting bank deposits, which include any service where a public company acts as a recipient of funds that transfer the current funds (ie, credit paid on demand) to make payments in lieu of coins on behalf of the account holder. Historically, in some states, this prohibition does not extend to a sole proprietor acting as a banker.
One of the arguments to justify the policy of requiring a banking license under the US Constitution is that banker loans sometimes disrupt the regulation of the value of coins, and therefore it is necessary and appropriate to make laws governing the banking.
US states tend to include licenses to conduct banking business as part of the company's franchise standard requirements in the establishment country bank charter. License may be implied by reference in the application of a charter to a bank created "under" the laws of the state banking. Federal storage agencies such as National Banks, or federal credit unions hire their authority from federal law charter laws. Opening or operating the bank also requires regulatory compliance, which may include Federal Deposit Insurance Corporation (FDIC) approval for coverage and opening accounts at the Federal Reserve Bank (or setting up facilities to complete checks through settlement with the Federal Reserve Bank issuing credits).
If the bank wishes to undertake a substantial fiduciary service, such as a trust department service, or acts as a securities broker, then the bank must apply for an additional special license for trustworthiness. Depending on the bank's charter specifications, these licenses are available on a diverse basis from the FDIC, Federal Reserve Board of Governors, or state regulators. Another option for such a bank is to create a Trust Company hired by the State and hold it as a subsidiary.
See also
- Finance
References
Source of the article : Wikipedia
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