One of the most important points of social debate in recent years. As a result of the so-called parabank, more than 11,000 were injured people and the total amount the resulting claim was estimated at over half a billion USD. Activities of Amber Gold and the analyzes of the Polish Financial Supervision Authority were widely heard, and the concept of parabank became permanent to everyday Polish.
It began to be a synonym not only for dishonest institutions financial – this term was collectively called almost every loan company that did not she called herself a bank. Of course, this distinction is somewhat more complex. What should you know about loan institutions and parabanks?
Bank, parabank, non-bank institutions – learn the basic definitions
All three of the above types of entities have one common denominator. They provide services financially to clients who apply to them through various resource activities financial (such as loans, credits or deposits).
State-owned, commercial and cooperative banks must comply with Banking Law and Act on mortgage bonds and mortgages. They have the exclusive right to, among others maintaining bank accounts, granting loans and issuing bank papers
securities. Non-bank institutions are not only companies that offer quick loans online. Insurance companies, pension funds, and homes also meet this definition brokerage – just like banks, they operate on the money transferred by clients, no, however, providing many services that remain the specialty of banks.
The term “parabank” is used to refer to non-bank financial institutions the offer overlaps with banking – especially in the field of deposit services. Lack their legal personality, which is proper to the bank, means that they are outside financial supervision and banking law. It is worth remembering that deposits created and topped up by customers do not have guarantees from the Bank Guarantee Fund.
Why is it not worth being afraid of non-bank institutions?
The fundamental difference between a parabank and a non-bank institution is the main profile activity. As far as loan companies specialize in a wide range of offers, such as payday loans or a quick online loan, the parabanks business is more often focused on the deposit business.
It is also worth remembering that the activities of loan companies must comply with the provisions of the Act on consumer credit and the Civil Code. To legally run this type of business you must have at least 200 thousand USD of capital, be registered as a limited liability company and acquire entry in the Register of Loan Institutions kept by the Polish Financial Supervision Authority.
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