Supervision Process for Credit Institutions 

Objectives

The objectives of the Central Bank of Ireland's supervision process for Credit Institutions are:

  • to foster a stable banking system and
  • to provide a degree of protection to depositors with individual credit institutions

Prudential Supervision

Prudential supervision involves monitoring the business of each credit institution including their compliance with our statutory and non-statutory requirements. Details of these requirements are set out in the Regulatory Requirements/Guidance section. 

It includes analysis of financial data submitted by credit institutions including prudential returns (weekly, monthly and annual) and annual reports. 

Review meetings and on-site inspections are conducted regularly with credit institutions as part of this process.

Cross Border Supervision

When the Central Bank of Ireland authorises a credit institution it is responsible, as home state regulator, for regulating their activities in other EU Member States. 

The Central Bank of Ireland is not responsible for the prudential supervision of Irish branches of credit institutions authorised in other EU member states and operating under a passporting arrangement in Ireland except, in co-operation with the home state regulator, for their compliance with liquidity criteria. 

As host state regulator the Central Bank of Ireland is responsible for consumer protection issues and compliance with anti-money laundering for the services provided by these entities in Ireland.  .

Consumer Protection Requirements

General

The supervision of conduct of business for banks is concerned mainly with the sales process, provision of information to consumers and complaints handling.  This aspect of supervision of banks is carried out by the Consumer Protection Codes Department. 

Consumer Protection Code 

In order to ensure a consistent level of protection for consumers regardless of the type of financial services provider they choose, the Consumer Protection Code (the Code) was introduced in August 2006. Following the introduction of legislation governing the authorisation of retail credit firms and home reversion firms, an Addendum to the Code was issued in May 2008.

The Consumer Protection Code has been updated and this revised Consumer Protection Code replaces the original Consumer Protection Code introduced in August 2006 and is effective from 1 January 2012.  Consumer Protection Code 2012.

Minimum Competency Requirements

The Minimum Competency Requirements (the Requirements) were introduced on 1 January 2007 and established minimum professional standards for financial services providers, with particular emphasis on areas dealing with consumers. The Requirements were introduced to ensure that consumers obtain a minimum acceptable level of competence from individuals acting for or on behalf of regulated firms in the provision of advice and associated activities in connection with retail financial products. An Addendum to the Requirements for Retail Credit Firms and Home Reversion Firms was issued in May 2008 and was implemented on 1 June 2008.

The Minimum Competency Requirements have been updated and the Minimum Competency Code 2011 came into effect on 1 December 2011.  Minimum Competency Code 2011

Conduct of Business Supervisory Process

We monitor compliance with the Consumer Protection Code and other conduct of business requirements by way of:

  • Advertising monitoring
  • Themed inspections
  • General Inspections
  • Mystery shopping

Approval of Charges

Credit Institutions authorised in Ireland, Prescribed Credit Institutions and Credit Institutions operating in Ireland on a branch basis must comply with Section 149 /Section 149A of the Consumer Credit Act, 1995 (as amended),  which provides that you shall not impose or increase a charge for a service provided to a customer or a group of customers, without the prior approval of the Central Bank of Ireland (the ‘Central Bank’).

For further information see the Information on the Bank Charges Approval Process.  

Supervisory Guidance 

The Central Bank of Ireland implements EU Regulations and issues guidelines to enhance our supervisory oversight.

Through our participation in the European Banking Authority (EBA) we have adopted the EBA guidelines for implementing a common European framework for supervisory disclosures in order to allow meaningful comparisons of supervisory rules and practices across Europe. 

Information is available under Supervisory Disclosures Requirements.