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Open a non-banking financial institution in Romania

What are non-banking financial institutions and what is the law which governs their activity in Romania?

According to Law no. 93/2009 regarding non-banking financial institutions, which is the legal framework in this area, non-banking financial institutions are entities that develop professional lending activities.

The type of lending activities these institutions may conduct in accordance to the above mentioned law are as follows:

▪ grant loans such as consumer loans, mortgages, home equity loans, microcredits, financing of commercial transactions, factoring operations, discounting and forfeiting, the law mentioning that this list is not exhaustive;

▪ issue guarantees, assumption of guarantee and financing commitments;

▪ financial leasing;

▪ grant loans to members of non-profit associations organized on the basis of the free will of the employees / pensioners;

▪ grant loans in exchange of goods as collateral, i.e. pledging via pawnshops;

▪ other forms of lending.

How can you open a non-banking financial institution according to the Romanian laws?

Non banking financial institutions are required to serve as joint stock companies. However, non-banking financial institutions subject to registration in the  evidence Register are not required to take the form of joint stock companies.

The name of a non-banking financial institution will include the phrase "non-banking financial institution" or its abbreviation, „IFN”. This condition is optional for non-banking financial institutions subject to registration in the above mentioned Register.

Regarding non-banking financial institutions subject to registration in the General Register, the minimum capital can not be less than the equivalent in RON of 200,000 euros, or 3,000,000 euros for non-banking financial institutions that grant mortgages.

However, the National Bank of Romania may set, through the means of regulations, higher levels for the minimum capital mentioned above.

The share capital of non-banking financial institutions must be fully paid upon subscription, including in case of its increase. The share capital is constituted and increased by cash contributions and contributions in kind are not allowed.

Regarding the shares issued by non-banking financial institutions, the legal framework in this field stipulates that they can only be nominative shares.

On what concerns the leaders of non-banking financial institutions, it is necessary that they hold the reputation and experience to exercise the responsibilities assigned to them in accordance with the criteria established by the National Bank of Romania.

Non banking financial institutions shall develop internal rules for granting lending which shall cover at least the creditworthiness of the beneficiary, the criteria and the conditions for granting the credit. Moreover, these institutions organize and administer the accountancy.

Is there an obligation for the non-banking financial institutions to register in the Trade Register?

According to Law no. 93/2009, the establishment of non-banking financial institutions subject to registration in the General Register shall be notified to the National Bank of Romania, within 30 days from the date of registration in the trade register.

This provision concludes the existance of an obligation of non-banking financial institutions to register in the Trade Register.

Are there certain prohibitions regarding the persons who may be founders or shareholders in a non-banking financial institution in Romania?

Yes. According to the legal framework, the following persons can not be founders, shareholders, members of the Supervisory Board, administrators or auditors of a non-banking financial institution:

a) persons nominated in the lists provided by art. 23 and 27 of Law no. 535/2004 on preventing and combating terrorism;

b) persons who are incapable or who have been convicted of crimes against property through disregard of trust, crimes of corruption, embezzlement, false documents offenses, tax evasion or money laundering;

c) persons convicted in the past five years for an offense under Law no. 93/2009.

What are the types of Registers related to the establishment of non-banking financial institutions in Romania? 

The establishment of non-banking financial institutions subject to registration in the General Register shall be notified to the National Bank of Romania, within 30 days from the date of registration in the trade register.

Non banking financial institutions may develop lending activities only after their registration in the General Register.

The issuance of the document certifying the enlistment of the institution0 in the General Register of the Romanian National Bank is made within 30 days from the submission.

Regarding the registration of non-banking financial institutions in the Special Register, the law stipulates that the Romanian National Bank provides certain special conditions which may, by way of example, concern: the turnover, the equity, the volume of loans etc.

Non banking financial institutions enlisted in the Special Register remain enlisted in the General Register. The National Bank of Romania sends the banking a document that informs upon the registration within 5 working days from execution, to the financial institution.

Non banking financial institutions carrying out activities such as lending, issuing of guarantees, financial leasing or other forms of financing similar to lending, exclusively from public funds or made available on the basis of intergovernmental agreements, as well as non-banking financial institutions organized as pawn houses or credit union, are subject to registration in the evidence Register.

The document certifying the registration in the evidence Register is sent out to the entities mentioned above, within 30 days from the submission of the complete documentation at the National Bank of Romania.

If you require more information on setting up a non-banking financial institution in Romania, as well as the documentation necesarry for opening up a financial institution , do not hesitate to contact our team of lawyers specialized in commercial law within the law firm Darie, Manea & associated who will ensure that the institution is founded according to your requirements.

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