How to Prepare Documents for Obtaining a Banking License in Europe

Nikita Veremeev

23.07.2025 | 6 min read

Updated: 24.07.2025

In 2024, over 5,000 credit institutions operate in the European market, but only about 3% of new bank license applications in the EU reach final approval. This statistic is not only surprising but also underscores that banking Licensing in Europe is one of the most complex and competitive processes in international business. Why is such a high percentage of applications rejected? The reason is not only the strict requirements but also strategic errors during document preparation, underestimation of compliance risks, and a lack of understanding of the specifics of interaction with European and national regulators.

Today, entrepreneurs and executives planning to launch a bank or fintech project in the EU face a unique challenge: how to navigate the multi-level oversight system, comply with CRD IV, SSM, AML/CTF, and national standards, and most importantly – prepare a document package that withstands the scrutiny of the ECB and national authorities.

In this article, I unveil a practical algorithm for document preparation to obtain a banking license in Europe, share COREDO’s experience, analyze common mistakes, and provide strategic recommendations that will help not just pass the licensing process but lay the foundation for a scalable and sustainable business. If you want not only to understand how to compile documents but also to learn how to avoid rejection and build trust with the regulator – I recommend reading to the end.

Key Requirements for a Banking License in the EU

Illustration to the "Key Requirements for a Banking License in the EU" section in the article "How to Prepare Documents to Obtain a Banking License in Europe"

The Role of the ECB, SSM, and National Regulators

The European banking system operates a unique supervisory mechanism, the SSM (Single Supervisory Mechanism), which combines the powers of the European Central Bank (ECB) and national competent authorities (NCA). For most applicants, the ECB sets the standards for banking licensing in the EU, including capital requirements, ownership structure, corporate governance, and compliance. National regulators (for example, BaFin in Germany, Bank of Lithuania in Lithuania) are responsible for the preliminary analysis of documents, due diligence, and local-level interaction with the applicant.

COREDO’s practice shows: licensing success depends on how well interaction with both levels of supervision is built. For significant banks (SI), the ECB plays a key role, while for less significant ones (LSI): the national authority, however, SSM and CRD IV standards are mandatory for all.

Main Regulatory Acts: CRD IV, RTS, and National Standards

EU banking licensing is regulated by the CRD IV (Capital Requirements Directive), which sets minimum requirements for capital, corporate governance, information disclosure, and internal control. Regulatory technical standards (RTS) detail the requirements for the format and content of documents, AML/CTF procedures, and the business and operational plan structure.

The COREDO team has implemented projects in the Czech Republic, Estonia, Cyprus, and the UK, where national legislation may complement or tighten CRD IV requirements. For example, in Germany, special attention is paid to due diligence of owners, while in Lithuania, to the transparency of the capital structure and IT infrastructure.

Step-by-Step Document Preparation for Obtaining a Banking License

Illustration to the "Step-by-Step Document Preparation for Obtaining a Banking License" section in the article "How to Prepare Documents to Obtain a Banking License in Europe"

Composition and Structure of the Mandatory Document Package

A key stage: forming a complete and structured document package for submission to the ECB and NCA. The standard list includes:

Business Plan: a detailed development strategy, financial forecasts, market analysis, unique value proposition.
Operational Plan: description of business processes, organizational structure, IT architecture, internal control system.
Financial Statements in IFRS: for shareholders and investors, confirmation of financial stability.
Internal Policies and Procedures: compliance, AML/CTF, risk management, corporate governance.
Documents on Ownership Structure: disclosure of all beneficiaries, confirmation of capital sources.
Top Management Qualification: CV, proof of experience, fit & proper assessment.
Due Diligence Documents: KYC, proof of fund legality, certificates of no criminal record.

Our experience at COREDO showed: missing at least one of these documents or non-compliance with the RTS format leads to requests for revision and increases the application review time by 2-3 times.

Business Plan and Operational Plan: Requirements and Mistakes

The business plan for a banking license in Europe is not just a formality but a key tool for the regulator to assess the viability and sustainability of the future bank. The ECB requires:

A clearly defined business model, description of target segments, and competitive advantages.
Financial forecasts for 3-5 years, including stress scenarios.
ROI assessment, scaling strategy, risk analysis, and measures to minimize them.

The operational plan should reveal details of IT infrastructure, KYC, AML/CTF processes, internal audit, and liquidity management. The solution developed by COREDO for one of the projects in Estonia allowed the integration of an automated transaction monitoring system, which increased the regulator’s trust and accelerated the application approval.

Common mistakes encountered by the COREDO team when auditing client applications:

Insufficient detailing of the business model and operational processes.
Absence of stress-testing scenarios.
Weak justification of income sources and expenses.
Non-compliance of the business plan structure with RTS requirements.

Confirmation of Capital Sources and Transparency of Ownership Structure

Requirements for the transparency of the ownership structure and confirmation of capital sources are among the most sensitive aspects of EU banking licensing. Regulators require:

Full disclosure of all ultimate beneficial owners (UBO).
Documents verifying the source of funds: bank statements, tax returns, sales contracts.
Reputation risk assessment of each shareholder.

In one of COREDO’s cases for a bank in Lithuania, special attention was paid to the transparency of the corporate structure and capital verification through international auditors, which helped avoid additional ECB requests.

Qualification and Experience of Top Management

Fit & proper assessment is a mandatory procedure for all board members and top management. Regulators evaluate:

Professional experience (at least 5 years in the banking or financial sector).
Reputation, absence of convictions, and conflicts of interest.
Competencies in corporate governance, compliance, internal audit.

COREDO regularly assists clients in preparing CVs, recommendations, and supporting documents, as well as organizing preliminary interviews with the regulator to minimize refusal risks.

Compliance Documentation and AML/CTF

Comprehensive compliance documentation for a bank should include:

Policy for preventing money laundering and terrorism financing (AML/CTF).
Description of KYC procedures and customer due diligence.
AML risk assessment – risk evaluation for each product and customer segment.
Internal control procedures, the role of the compliance officer, AML systems integration.

COREDO’s practice confirms: quality AML/CTF documentation is one of the main success factors in licensing, especially for banks with international capital structures.

Due Diligence of Owners and Beneficiaries

Due diligence of owners and ultimate beneficiaries includes:

Verification of the legality of fund origins.
Assessment of business reputation and asset ownership history.
Analysis of ties with politically significant persons (PEP), sanction lists.

In one of COREDO’s projects in the Czech Republic, the team organized an independent audit of the ownership structure, which helped expedite the application review and increase the level of trust from the NCA.

Internal Policies, Procedures, and IT Infrastructure

Internal policies and procedures should cover:

Management of operational, credit, market, and reputation risks.
Internal audit, regular inspections, bank stress testing.
IT infrastructure requirements: data protection, cybersecurity, system backup.

COREDO develops tailored regulations considering jurisdiction specifics and ECB requirements, which is especially important for banks with digital business models and remote customer service.

Regulatory Requirements for Charter Capital and Financial Stability

Jurisdiction	Minimum Charter Capital	Licensing Features
Lithuania	1 million € (special bank), 5 million €	Fast licensing, SSM
Germany	5 million €	Strict due diligence, ECB
Cyprus	5 million €	Popular for EMI/PI

The minimum charter capital for a banking license in Europe ranges from 1 to 5 million euros depending on the jurisdiction and type of license (universal bank, EMI, PI). Financial statements in IFRS, confirmation of stability, and stress testing are mandatory document package elements.

The COREDO team recommends forming capital reserves considering not only the minimum requirements but also the planned scale of operations, which reduces rejection risks and facilitates subsequent business scaling.

Interaction with Supervisory Bodies and the Application Review Process

Illustration to the "Interaction with Supervisory Bodies and the Application Review Process" section in the article "How to Prepare Documents to Obtain a Banking License in Europe"

Submitting Documents to the ECB and National Authorities (NCA)

The process of licensing banks in Europe begins with submitting a complete document package to the national competent authority (NCA), which conducts a preliminary analysis and forwards the application to the ECB. It is important to:

Follow the formats and RTS requirements.
Prepare documents in English (or the jurisdiction language).
Ensure transparency of the corporate structure and capital sources.

COREDO assists clients at all stages of communication with regulators, including preparing responses to requests and organizing meetings with ECB and NCA representatives.

Common Reasons for Rejection and License Revocation

Among the most frequent reasons for rejection or revocation of a banking license in the EU:

Insufficient detailing of the business and operational plans.
Non-compliance of compliance documentation with ECB and national standards.
Lack of transparency in ownership structure or capital sources.
Insufficient qualification of top management.
AML/CTF procedure violations.

COREDO’s practice shows: thorough preliminary preparation and independent document audit can reduce rejection risk by 60–70%.

Features of SI and LSI Bank Licensing

Illustration to the "Features of SI and LSI Bank Licensing" section in the article "How to Prepare Documents to Obtain a Banking License in Europe"

Under the SSM, banks are divided into significant (SI) and less significant (LSI) institutions. For SI, licensing and oversight are carried out directly by the ECB, while for LSI – by the national authority under SSM control. Differences concern the depth of due diligence, capital requirements, frequency of supervisory checks, and the volume of disclosed information.

COREDO develops individual licensing strategies considering the bank’s status, which allows optimizing time and resources for document preparation.

Practical Steps and Recommendations for Successful Banking License Acquisition

Illustration to the "Practical Steps and Recommendations for Successful Banking License Acquisition" section in the article "How to Prepare Documents to Obtain a Banking License in Europe"

Conduct an independent audit of the business model and capital structure before applying.
Invest in developing comprehensive compliance documentation, integrating AML systems, and staff training.
Ensure transparency of all corporate connections and funding sources.
Prepare an operational plan considering IT infrastructure requirements, internal control, and stress testing.
Organize preliminary consultations with NCA and ECB to clarify the specific requirements of the chosen jurisdiction.
Utilize the experience of external consultants with successful licensing practice in the EU – this minimizes rejection risks and accelerates the application review process.

Key Conclusions and Actionable Advice for Entrepreneurs

Obtaining a banking license in Europe: this is not only a matter of document preparation but also a strategic project requiring a deep understanding of regulatory requirements, business transparency, and readiness for long-term interaction with supervisory bodies. COREDO’s experience confirms: success is achieved where entrepreneurs invest in the quality of the business plan, ownership structure transparency, team qualification, and strategic compliance.

I recommend:

Start licensing preparation with an internal audit and independent business model assessment.
Form a team with experience in international banks and knowledge of SSM, CRD IV, AML/CTF requirements.
Implement modern IT solutions for risk management, compliance, and financial monitoring.
Consider licensing as part of long-term strategic planning and scaling business in the EU.

The COREDO team is ready to be your partner at every stage – from jurisdiction selection to successful license acquisition and building a sustainable bank that meets the highest European standards.