German Banking Act is a legal banking supervising guidance made for the Banks set up within the geographical boundary of Germany. The act governs and safeguards the practicability and feasibility of the banking industry that is sensitive to many financial instruments like inflationary fluctuations, etc.
Keeping in view the different free market principles, German Banks Act is supervised by the Federal Banking Supervisory Office, in collaboration with Deutsche Bundesbank. The Federal Banking Supervisory Office informs and is administered by the Federal Ministry of Finance directly.
Some of the features of the German Banking Act explain as:
Banking business in Germany is nothing but credit institutions that conduct monetary transactions and other banking services in the commercial platform. It includes:
Acceptance of deposits from the customers and their repayment on different occasion to the depositors
Granting loans and credits, with different time spans and interest rates under different schemes and conditions
Transaction of financial instruments in their own name or what is technically known as Principal Broking services.
Administration and controlling of different kinds of securities, like safe custody business.
Purchase of bills of exchange and checks
Investment management or those business specified in Section 1 of Act on Investment Companies
Acquirement of loans based claims prior to their maturity
Providing guarantees and warranties on behalf of others institutions.
Management of payment and clearing operations which are not in cash.
The German Banking Act also known as Gesetz über das Kreditwesen was last amended on 21 August, 2002.
