Full Banking Licence is the authorisation that lets a company operate as a credit institution, taking deposits and other repayable funds from the public and granting credit on its own account. In the EU it is issued under the Capital Requirements Directive (Directive 2013/36/EU), and every other banking activity can sit under it. Unlike an EMI or payment institution, a bank can fund loans from customer deposits. Article 12 CRD sets initial capital at €5 million, and supervisors must decide on a complete application within twelve months. Buying an existing bank avoids the build-out but still requires notifying the supervisor at a 10% qualifying holding, with ECB review taking 60 to 90 working days.
What does a full banking licence allow
Deposit-taking is the activity no other fintech licence permits. An EMI can hold client money only as electronic money, must safeguard it and cannot lend it out; a payment institution can extend credit only short-term and in connection with a payment. A bank can fund loans from customer deposits, which is why a deposit balance sheet changes the economics of a lending or card business. A specialised banking licence restricts the activity list; a full licence does not.
What capital does a bank need
Article 12 CRD sets initial capital at no less than €5 million. Member states may authorise particular categories of credit institution with less, but never below €1 million, and must tell the European Commission and the EBA why. Initial capital is only the entry ticket: once operating, the bank must meet ongoing own-funds ratios against its risk-weighted assets, so a lender planning €200 million of loans will need far more than €5 million on day one.
How long does it take to get a banking licence
Under Article 15 CRD, a supervisor that refuses an application must say so, with reasons, within six months of receiving a complete file, and must decide in every case within twelve months of receipt. In the euro area, national supervisors receive the application and the ECB takes the final licensing decision. Before that clock starts, applicants usually spend months on pre-application meetings, capital planning, and hiring a board and key function holders who will pass fit-and-proper review.
Buying a bank instead of applying
Acquiring an existing credit institution skips the build-out but not the regulator. Anyone reaching a qualifying holding (10% or more of capital or voting rights, or significant influence) must notify the supervisor, and further notification is required when a holder crosses 20%, 30% or 50%. The ECB reviews such notifications within 60 working days, extendable by up to 30 working days to a maximum of 90.
A worked example: a buyer agreeing in March to acquire 60% of a small licensed bank, with a complete notification filed in May, should plan for approval in August at the earliest and November if the review is extended, plus any time the regulator spends deeming the file complete.
What a buyer checks in due diligence
Due diligence on a bank focuses on capital headroom over requirements, the quality of the loan book, open supervisory findings, and whether the licence scope and passports match the buyer's plan. A licence with thin capital headroom or a remediation order lowers the price because the buyer must fund the gap on completion.