1.1 Key Laws and Regulations

Banking business in Ireland is regulated under both domestic legislation and the legislation of the EU, which is either directly applicable in Ireland or has been transposed into Irish law by domestic provisions. New laws and regulations applicable to Irish banks are primarily driven by developments at the EU level.

Domestic Legislation

The primary domestic legislation establishing the framework for the regulation of banking activities in Ireland is the Central Bank Acts 1942-2018 (Central Bank Acts). The Central Bank Act 1942 originally established the Central Bank of Ireland (CBI) as a central bank. Following the introduction of the Central Bank Reform Act 2010 (2010 Act), the CBI is also the primary Irish financial regulatory body.

The Central Bank Act 1971 (1971 Act) establishes the requirement for persons carrying on "banking business" to hold a banking licence, and sets out certain requirements applicable to banks.

The CBI is empowered under the Central Bank Acts to issue codes of practice and regulations to be observed by banks. The CBI has issued several such codes in areas such as corporate governance, related party lending, mortgage arrears and consumer protection.

European Legislation

Irish banks are also subject to extensive regulatory requirements driven by EU initiatives regulating the activities of "credit institutions" (the terms "credit institution" and "bank" are used interchangeably). These include the Fourth Capital Requirements Directive (2013/36/EU) (CRD IV), the Capital Requirements Regulation ((EU) 575/2013) (CRR) and the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD). CRD IV is transposed into Irish law by the European Union (Capital Requirements) Regulations 2014 (CRD IV Regulations), while the CRR, as an EU regulation, is directly applicable. BRRD is implemented in Ireland by the European Union (Bank Recovery and Resolution) Regulations 2015 (BRRD Regulations).

CRD IV has recently been amended by Directive (EU) 2019/878 (CRD V), and amendments to the CRR will be introduced by Regulation (EU) 2019/876 (CRR II) (see 10 Horizon Scanning).

Regulation (EU) 1024/2013 (SSM Regulation) establishes the Single Supervisory Mechanism (SSM), which is responsible for banking supervision in the participating Member States, such as Ireland. Under the SSM, the European Central Bank (the ECB) has exclusive competence in respect of certain aspects of the prudential regulation of Irish banks, including the granting and withdrawal of banking licences and the assessment of notifications of the acquisition and disposal of qualifying holdings in banks (except in the case of a bank resolution). The ECB also directly supervises "significant" banks (SIs), while the CBI directly supervises "less significant" banks (LSIs), subject to ECB oversight. The SSM sets out criteria for determining SIs and LSIs.

Other Regulatory Bodies

Other regulatory bodies that are also relevant to Irish banks include the Office of the Director of Corporate Enforcement, the Competition and Consumer Protection Commission, which regulates competition and consumer affairs, the Data Protection Commission, which enforces data protection legislation in Ireland, and the Financial Services and Pensions Ombudsman, which handles complaints from consumers of financial services.


2.1 Licences and Application Process Banking Business

Section 7(1) of the 1971 Act prohibits the carrying on of "banking business" or accepting deposits or other repayable funds from the public without a banking licence. The definition of "banking business" is any business that consists of or includes receiving money on the person's own account from members of the public either on deposit or as repayable funds and the granting of credits on own account (subject to certain exceptions).

While the 1971 Act does not define "repayable funds", section 2(2) of the Central Bank Act 1997 defines "deposit" for the purposes of the Central Bank Acts as "a sum of money accepted on terms under which it is repayable with or without interest whether on demand or on notice or at a fixed or determinable future date."

A person may apply for a banking licence to be granted under Section 9 of the 1971 Act. Since the introduction of the SSM, the ECB is the competent authority for the granting of the licence.

It is also possible to apply for authorisation under Section 9A of the 1971 Act for an Irish branch of a bank that is authorised in a third country (ie, a non-EEA country).

Holding oneself out as a banker

Section 7(1) of the 1971 Act also restricts persons from holding themselves out or representing themselves as a banker, or from carrying on banking business unless appropriately authorised.

The 1971 Act provides that, where a person carries out business under a name that includes the words "bank", "banker" or "banking", or any word which is a variant, derivative or translation of or is analogous to those words, or uses any advertisement, circular, business card or other document that includes such words, he holds himself out or represents himself as conducting or being willing to conduct banking business.

Permitted Activities

A banking licence permits the holder to engage in a broad range of business, including deposit taking, lending, issuing e-money, payment services and investment services and activities regulated by the Markets in Financial Instruments Directive (2014/33/ EU) (MiFID II).

Application Process

In practice, the application process for a bank licence typically begins with a preliminary engagement phase, whereby the applicant will often have meetings or calls with the CBI and submit a detailed proposal for their application.

Following this, the applicant will prepare its formal application. The application pack requires extensive detail regarding all material areas of the applicant's proposed business, as set out in the CBI's "Checklist for completing and submitting Bank Licence Applications under Section 9 of the Central Bank Act 1971", which is available on the CBI's website.

The information required includes:

  • details of the applicant company's parent or group and beneficial ownership;
  • objectives and proposed operations;
  • details of the proposed bank's "Heart and Mind" being in Ireland;
  • details of internal controls;
  • capital and solvency;
  • details of information technology and business continuity planning; and
  • details of recovery and resolution planning.

Following the receipt of the application, the CBI will assess the application, in conjunction with the ECB. The process is iterative and typically involves multiple rounds of extensive comments and queries from the regulators.

Following the completion of the iterative query stage, the ECB will determine whether to grant a licence. The timeline for this entire process generally takes between 12 and 18 months. Where a licence is granted, it may be subject to specific conditions.

There is no fee for submitting a bank application, but banks are subject to a number of ongoing levies.


Under the CRD IV mutual recognition provisions, Irish banks can both provide services on a freedom of services basis and establish a branch on a freedom of establishment basis across the EEA, subject to completing the necessary passporting processes.


3.1 Requirements for Acquiring or Increasing Control over a Bank

Requirements Governing Change in Control

The requirements in relation to the acquisition and disposal of interests in banks are set out in Chapter 2 of Part 3 of the CRD IV Regulations. The CRD IV Regulations provide that the prior approval of the ECB is required in advance of any proposed acquisition of a qualifying holding in a bank.

A "qualifying holding" is defined as a direct or indirect holding in an undertaking which represents 10% or more of the capital or of the voting rights, or which makes it possible to exercise a significant influence over the management of that undertaking. Notification is also required in respect of direct or indirect holding increases above a prescribed percentage of 20%, 33% or 50%.

There are no restrictions on private ownership or geographical restrictions on foreign ownership of Irish banks. However, the CBI has expressed preferences in the past that banks not be owned or controlled by single private individuals or that ownership of banks should not be "stacked" under insurance undertakings. Prior ownership experience of banks or other financial institutions will be an advantage in applying for approval of an acquisition of a qualifying holding.

The CRD IV Regulations provide that an application to the Irish High Court may be made to remedy a situation where a qualifying holding was inadvertently acquired without the prior approval of the ECB.

The Nature of the Regulatory Filings

Notification of the proposed acquisition of a qualifying holding is made to the CBI using the CBI's Acquiring Transaction Notification Form (ATNF). The CBI, in turn, will liaise with the ECB, which is the competent authority under the SSM for the approval of acquisitions of or increases in qualifying holdings in respect of Irish authorised banks.

The maximum total period for assessment of an acquiring transaction notification is 90 working days from the receipt of a complete application. The CBI can reject notifications as not complete at the outset of the process, and so in practice this process can take longer. The CBI advises that pre-application engagement and the submission of notification and supporting documentation in draft form can help minimise the risk of a notification being deemed "incomplete", thereby delaying the approval process.

The CBI also requires any proposed acquirers to take note of the content of the May 2017 Joint Committee of the European Supervisory Authorities (which includes the European Banking Authority – EBA) "Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the banking, insurance and securities sectors".

The content required to complete an ATNF includes details of:

  • the proposed acquisition and impact on the target;
  • the proposed acquirers and financing of the proposed acquisition;
  • the rationale for the proposed acquisition; and
  • details of the new proposed group structure and any impact on supervision.

A business plan for the target entity may also be required with the notification, detailing the proposed acquirers' expected activities/performance and financial projections over three years.

The CBI may also seek comfort from a proposed acquirer of a majority stake in an Irish bank that the proposed acquirer will provide such financial support as is necessary for the Irish bank to continue to meet its regulatory obligations.

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Originally published by Chambers Global Practice Guide: Banking Regulation – Ireland: Law and Practice (December 2020).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.