Obtaining a banking license grants the ability to offer a wide range of financial and banking services. The authorization to conduct banking activities certifies that the bank has complied with all legislative requirements (of a given jurisdiction) concerning the protection of clients' funds and data.

In this material we will analyze what a banking license is and who needs it.

A banking license is an authorization that permits the provision of specific banking operations and services. A banking permit indicates that a financial institution complies with a series of rigorous governmental directives in the nation where the permit was pursued. Only an institution with a financial charter can lawfully identify itself as a bank.A financial institution must meet strict requirements in order to obtain a banking license, such as keeping adequate financial reserves and making sure that information systems are well protected.

Types of banking licenses

There are 4 major types of banking licensing, these include:

  • Obtaining a standard banking permit

Financial institutions holding this classification of license maintain the conventional approach of offering financial services and products, incorporating a tangible footprint with branches and extensive operational activities.

  • Obtaining a fintech license

Thanks to such permits, fresh financial institutions arise that exclusively utilize digital technologies, providing identical products and services as conventional banks, albeit lacking physical branches and emphasizing online customer support.

  • Obtaining an extended banking license

These are virtual banks functioning solely through digital means, leveraging the authorization of a main banking institution to provide a variety of financial services and catering to a specific clientele. Digital banks differ from their parent company, having their own distinct identity and array of services.

  • Obtaining E-money licenses

An electronic capital permit authorizes businesses to provide transactional and financial services, such as currency exchange and money transfers, but it does not provide them the authority to act as a bank or manage deposits. The ability to offer a broad range of banking and transactional services to clients is limited for entities that possess just an electronic capital permit or a comparable authorization, such as Digital Capital Institutions or Transaction Service Providers. They usually help with transactional processes like currency exchange and money transfers.

The pivotal distinction between an electronic money license and a banking license lies in the custody and safeguarding of consumer funds. Entities dealing with electronic money are mandated to partner with a bank for the storage of funds.

Conversely, a licensed bank directly retains and secures its clients' funds independently.The granting of fresh banking permits has bolstered market rivalry and optimized financial administration for clients. The banking industry is poised for further advancement as additional nations embrace analogous licensing structures.

Where can you get a banking license?

It is important to understand that each country sets its own rules for licensing and supervision of banking activities. Among the most popular options you can consider:

  • Obtaining a banking license in Europe

The initiation of the review process for obtaining a banking license in European countries requires companies to submit an application to the national regulatory authority, such as the European Central Bank.

The application process for an electronic money license in Europe can take up to 15 months. Securing a European banking license can extend to eighteen months and entails higher costs. The requirements for minimum authorized capital will vary depending on the chosen country. You might consider the following option:

  • Obtaining a Maltese banking license

Malta is a very desirable destination for financial businesses wishing to register within the EU and facilitate their banking activities. Malta functions as a tactical entry point for individuals seeking to into the EU banking services industry.

The operations of financial institutions in Malta are regulated by the Banking Act, in addition to guidelines and rules issued by the Malta Financial Services Authority. To acquire a banking permit in Malta, it is imperative to take into account the standards for the effective assessment of the application, which include:

  1. The applicant must have a minimum initial share capital of EUR 5,000,000.
  2. Have competent personnel in the structure.
  3. Carry out proper management and prudential execution of the banking business.

The candidate should enable the unrestricted exchange of information between itself and the Malta Financial Services Authority, considering the safeguarding of depositors.

  • Obtaining a banking license in Switzerland

Financial institutions' activities are regulated by the local Banking Act. The primary supervisory authority for the financial sector is the Financial Market Regulatory Authority. A minimum of 3 compliance officers and a Chief Executive Officer, who must reside in Switzerland, must be employed by a bank. To secure a banking license in Switzerland, it is obligatory to fully pay a minimum capital of 10 million Swiss Francs (9,142,000 EUR), which must be deposited and maintained within the company from the beginning of operations until its conclusion.

  • Obtaining a banking license in the UK

In the United Kingdom, two primary regulatory bodies oversee banking activities: the Prudential Regulation Authority and the Financial Conduct Authority. Initially, applications for a banking license must be submitted to the Prudential Regulation Authority. However, the PRA can approve or deny the application only with the consent of the Financial Conduct Authority. The process of obtaining a UK banking license typically takes a minimum of six months. The country mandates an official fee of £25,000 for the issuance of a banking license, in addition to requiring the submission of a Capital Planning Buffer.

  • Obtaining a banking license in Asia

Asian countries occupy leading positions and are among the world's financial centers. In this region we can note:

  • Obtaining a banking permit in Singapore

The primary financial industry regulator is the Monetary Authority of Singapore. Getting a digital banking license in Singapore or a complete banking license in Singapore are the two options. Depending on the bank's categorization and range of services offered, a virtual banking license in Singapore requires a minimum paid-up capital of SGD 15 million (EUR 9,302,843).

  • Obtaining a banking license in Hong Kong

The Hong Kong Monetary Authority serves as the principal regulatory body overseeing banking and financial operations. The minimum capital requirements are set higher for licensed banks (HKD 300 million, EUR 31,886,702) compared to restricted license banks (HKD 100 million, EUR 10,628,900) and deposit-taking companies (HKD 25 million, EUR 2,657,225).

  • Obtaining a banking license in the USA

Banking activity in America is regulated both at the federal and state levels. The primary federal banking laws upon which to rely in the process of obtaining an American banking license include:

  1. The Bank Holding Company Act, which regulates the activities of bank holding companies, their subsidiaries and branches.
  2. The International Banking Act, which regulates the activities of American banks in the United States and the activities of American banking organizations outside the country.
  3. Various securities laws govern the distinct roles of banking organizations as issuers of securities and market participants.
  4. The Federal Deposit Insurance Act, which establishes qualifications and requirements for insurance and authorizes the Federal Deposit Insurance Corporation to act as its supervisory and regulatory authority.

All laws contain provisions:

  • The Foreign Bank Supervision Act, which increased scrutiny of non-U.S. banks in the United States and was part of the Federal Deposit Insurance Corporation Improvement Act.
  • The Gramm-Leach-Bliley Act, which allows banks to merge with securities dealers and insurance and other financial services firms.
  • Sarbanes-Oxley Act, which strengthened corporate governance and reporting requirements.
  • The Dodd-Frank Act, which enacted numerous consumer, financial institution, and systemic protections in the wake of the monetary crisis.

There is a dual banking structure in place in the country wherein a bank may be chartered in the United States of America by either the state government or the Office of the Comptroller of the Currency. This allows the applicant to later apply for a banking license in the United States. The minimum allowed capital varies by state and sector, from 2 to 10 million USD.

  • Obtaining a banking license in Australia

Bank regulation in Australia is handled by the Australian Securities and Investments Commission. The Australian Prudential Regulation Authority must receive an application for the necessary permission from any firm wishing to conduct banking operations and acquire a banking license in Australia in accordance with the Banking Act. An Authorized Deposit-taking Institution is a company that has been licensed by the regulator to carry out banking operations in the future. 110,000 AUD (70,000 EUR) is the minimum capital required to subscribe.

  • Obtaining an island banking license

An offshore banking license permits its holder to operate a bank in one country, offering services to depositors residing in other countries. The license is issued by the country where the bank operates and need not necessarily be the same country of citizenship or residency of its owner. Typically, these jurisdictions feature low or even zero tax rates. There are two main types of offshore banking licenses:

  1. Acquiring a comprehensive offshore permit, commonly referred to as a Grade A license, authorizes the bearer to conduct various banking operations.
  2. Obtaining a limited offshore license. It limits the owner to the activities specified in the license.

The majority of nations that grant licenses for offshore banking also demand paid-up capital and an annual fee. Jurisdiction-specific amounts may differ, although in almost all cases, the capital donated is greater than the yearly charge. While the paid-up capital offers some guarantee that the bank will continue to be stable and operating, the fee is sent to the state authority.


A banking license serves as proof of a financial institution's capability to conduct secure banking operations. Banks with licenses are mandated to independently manage customer funds and offer a wide array of financial services. These services include issuing debit and credit cards, handling deposits in both personal and commercial accounts, and facilitating currency exchange. Obtaining a banking license formally recognizes the institution as an authorized bank, ensuring the safety of customer deposits. Banking licenses are typically categorized into traditional banking, fintech, extended banking, and e-money licenses.

For comprehensive insights regarding regulatory compliance or the authorization procedure, you may consult our experts for a personalized advisory session.