Question ID
2014_1626
Legal act
Directive 2013/36/EU (CRD)
Topic
Other issues
Article
9
Paragraph
1
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
Not applicable
Article/Paragraph
Not applicable
Type of submitter
Law firm
Subject matter
Scope of deposit monopoly
Question

According to Article 9(1) of Directive 2013/36/EU (CRD), only credit institutions can carry on the business of taking deposits or other repayable funds from the "public". Will the operation of a group account arrangement within an industrial group - which, inter alia, requires a subsidiary to deposit funds with its parent company - breach the deposit monopoly in Article 9(1) of the CRD? The purpose of such a deposit requirement is generally to optimise the liquidity management within the group. The arrangement only applies to subsidiaries within the group.

Background on the question

Industrial groups operating group account arrangements in several EU/EEA countries may experience divergent regulatory practices relating to the concept of "the public". Deposits with a parent company (which is not regulated as a bank/credit institution) may be contrary to the deposit monopoly as laid down in Article 9(1) of the CRD, as deposits from wholly-owned subsidiaries may be deemed to be deposits from the "public".

Submission date
Final publishing date
Final answer

The prohibition referred to in Article 9(1) of Directive 2013/36/EU (CRD) relates to the carrying out the business of taking deposits or other repayable funds from the public. Any taking of deposits or other repayable funds is relevant only if it is carried out as a business of the person or undertaking and if it is taken from the public.

To the extent that taking deposits or other repayable funds does not form part of an undertaking's business and does not concern the public, the prohibition of Article 9(1) of the CRD should not be deemed as capturing cases, in particular when the relevant objective pursued is distinct, as in the case at hand, where deposits are made between a subsidiary and its parent company and exclusively with a view to optimise the liquidity management of the group. 

Status
Final Q&A
Answer prepared by
Answer prepared by the EBA.
Note to Q&A

Update 26.03.2021: This Q&A has been reviewed in the light of the changes introduced to Directive 2013/36/EU (CRD) and continues to be relevant.

Disclaimer

The Q&A refers to the provisions in force on the day of their publication. The EBA does not systematically review published Q&As following the amendment of legislative acts. Users of the Q&A tool should therefore check the date of publication of the Q&A and whether the provisions referred to in the answer remain the same.