Basic financial institutions in Poland
Understanding the financial system is the foundation for informed use on a daily basis. Here is a detailed description of the key institutions:
Commercial banks
Banks are the largest and most comprehensive financial institutions. They operate under the Banking Act and are supervised by the Financial Supervision Commission (KNF). The KNF is the guardian of the stability of the entire financial sector, which gives customers a sense of security.
The banking system in Poland is considered stable and secure, which is the result of sound regulation and supervision. The Banking Law, which is the foundation of its functioning, was enacted on 29 August 1997. Since then, it has been amended several times to adapt to changing market realities, global standards and European Union requirements.
The legal framework of the Polish banking system is contained in the Act of 29 August 1997. – Banking Law.
The Act sets out:
- principles for conducting banking activity, establishing and organising banks, branches and representative offices of foreign banks, as well as branches of credit institutions,
- principles for the creation and operation of a security system,
- principles of reorganization, liquidation and bankruptcy of banks,
- certain principles for the conduct of business by financial holding companies and mixed financial holding companies and for the organisation of such companies, as well as certain principles for the supervision of such companies,
- rules for the exercise of banking supervision, including consolidated supervision.
The Act defines a bank as a legal person established in accordance with the provisions of the Acts, operating on the basis of authorisations authorising the performance of banking activities that put at risk funds entrusted under any repayable title.
Banking activities that can only be performed by a bank, according to the Banking Law, are:
- accepting deposits of money payable on demand or on a specified date and maintaining accounts for such deposits,
- maintaining other bank accounts,
- granting credits,
- granting and confirming bank guarantees and opening and confirming letters of credit,
- issuing bank securities,
- carrying out bank monetary settlements,
- performing other activities stipulated exclusively for a bank by separate acts.
Source: Ministry of Finance: www.mf.gov.pl
The stability of the Polish banking sector is based on several key pillars:
Capital in the bank:
Polish banks are obliged to maintain a high level of capital, which acts as a safety cushion in the event of a financial crisis. This allows banks to absorb losses without jeopardising solvency and customer deposits.
Risk and liquidity:
Banks have to comply with strict risk and liquidity management standards. The Financial Supervisory Commission (FSC) monitors their activities on an ongoing basis to ensure that they have enough funds to meet any withdrawals.
Supervision Financial Supervisory Commission:
It is the FSC that is the main guardian of stability. The Commission regularly carries out inspections, audits banks’ accounts and imposes penalties for violations. The FSC’s actions are aimed at preventing excessive risks that could put customers’ money at risk.
Bank Guarantee Fund (BFG):
As already mentioned, the BFG guarantees the return of deposits up to €100,000, which builds trust in banks and protects the savings of Poles, as well as people who use banking services in Poland.
Thanks to these mechanisms, the Polish banking system shows great resilience, even in periods of global economic turmoil.
Role and functions:
Banks do not only store money. They also offer:
- Bank accounts (personal, savings, foreign currency)
- Payment cards (debit and credit)
- Deposits and other investment products
- Loans (cash, mortgage, car loans)
- Insurance (e.g. life, home)
- Electronic banking (online and mobile)
Examples of banks in Poland:
There are many banks in Poland that offer a variety of products and services. Here is a list of the largest banks:
- PKO Bank Polski (often referred to as “PKO bank”)
- mBank
- Santander Bank Polska
- ING Bank Śląski
- Bank Millennium
- Bank Pekao S.A.
- BNP Paribas Bank Polska
- Alior Bank
- Citi Handlowy
- Credit Agricole Bank Polska
- VeloBank
- Bank Pocztowy
- Nest Bank
- Plus Bank
- Cooperative Banks (e.g. BPS, SGB)
Many of them offer special products for foreigners, including service in Ukrainian.
Co-operative Savings and Credit Banks (SKOKs)
SKOKs operate on a cooperative basis, which means that you have to become a member in order to become their customer.
- Regulation: Their activities are regulated by a separate act. SKOKs are also subject to the supervision of the FSA, which ensures safety
- Offer: They offer products similar to banks, often with more flexible terms and conditions, especially in smaller localities
Data collection institutions: BIK and BIG
- BIK (Credit Information Bureau): Stores information about your credit history. Every bank is obliged to report to the BIK whether you are paying your debts on time. A good credit history is the key to obtaining credit in the future, e.g. for a flat. www.bik.pl
How do you build a positive history? By always paying your bills and loan instalments on time.
- BIG (Business Information Bureau): Stores data on other types of debts, e.g. from unpaid loan instalments, bills or telephone instalments or fines. There are several debtor registers in Poland, e.g. BIG InfoMonitor, www.big.pl KRD (Krajowy Rejestr Długów). www.krd.pl
Bank Guarantee Fund (BFG)
This is an absolutely key institution for your financial security.
- Role: The BFG guarantees that in the event of a bank failure, you will get your money back.
- Guarantee: the guarantee covers deposits (personal accounts, savings accounts, deposits) up to the equivalent of €100,000 in PLN. This means that even if you accumulate PLN 400,000 in one bank and the bank goes bankrupt, you will recover the whole amount
Narodowy Bank Polski (NBP) www.nbp.pl
Key institution in the Polish financial system
The National Bank of Poland (NBP) is the central bank of the Republic of Poland, i.e. the most important financial institution in the country, whose role differs significantly from commercial banks. According to the Polish Constitution, the NBP has the exclusive right to issue money and is responsible for the stability of the value of the Polish currency, the zloty. This means that its main objective is to keep inflation low, so that the purchasing power of money does not fall too quickly.
To accomplish its tasks, the NBP performs three key functions:
Issuing bank
This is the most well-known function of the NBP. It is the only institution in Poland that can issue (i.e. put into circulation) banknotes and coins. The NBP is responsible for:
- Issue volume: Decides how many banknotes and coins are needed in circulation.
- Security of money: Responsible for the liquidity of circulation, i.e. it ensures that cash is never in short supply, but also that there is no excess, which could contribute to inflation.
- Designs and denominations: Determines what Polish banknotes and coins look like and what their value is.
Bank of banks
The NBP acts as the ‘banker’ for all commercial banks in Poland. It is crucial for the stability of the entire banking system. NBP:
- Regulates liquidity: It can lend money to commercial banks that have temporary liquidity problems. In this way, it prevents crises and protects customers’ money. The NBP is seen as the ‘lender of last resort’.
- It sets interest rates: Through the Monetary Policy Council (MPC), the NBP sets the main interest rates. This has a huge impact on the economy. When interest rates rise, loans become more expensive and saving becomes more costly. In this way, the NBP can influence inflation by discouraging people from overspending.
- It oversees payment systems: It makes sure that money transfers and card payments in Poland operate efficiently and safely.
Central bank of the country
The NBP acts as the main bank for the government and state institutions.
- It maintains the accounts of the state: It maintains accounts for the state budget and for many public institutions. These accounts receive, for example, your taxes, which are then used for state needs.
- Manages foreign exchange reserves: The NBP manages reserves of foreign currencies (e.g. euro, dollar) and gold. These reserves are crucial for the credibility of the state and the stability of the zloty on international markets