Legal Aspects of Banking – Assignment 4

Banking System in Netherlands

Submitted By:
Amit Kumar Sindhu
PRN-18020942053
 The Netherlands Bank

Introduction:

The Netherland Bank (DND) is the central bank of the Netherlands. It is part of
the European System of Central Banks (ESCB). The Netherlands Bank is a public
limited company whose every day policy is overseen by the Governing Board. Being an
NV, DND has a Supervisory Board.
In addition, there is an advisory body called the Bank Council . As a public entity the
DND has a function as both part of the European System of Central Banks (ESCB) and
public body

Functions of The Netherland Bank:

The functions of the central bank perform the Bank of the Netherlands found in 1814,
whose headquarters are in Amsterdam. It acts as a state-owned bank and “bankers’
bank”.
“The Bank of the Netherlands ensures fiscal and operational supervision over the
officially registered financial institutions. Fiscal supervision includes monitoring
compliance with the liquidity and solvency of credit institutions prescribed level and
licensing agencies after their foundation. The Central Bank has the authority to license
foreign exchange transactions, but in fact he communicated the functions of commercial
banks. The central bank act as intermediary in international payments, it also oversees
the issuance of securities in the domestic market

DND also has various national tasks, which are laid down in the Bank Act 1998. It
supervises banks, trust offices, pension funds and insurance companies, among other
institutions. DND’s other tasks include compiling statistics, discharging its national
resolution tasks and implementing the deposit guarantee scheme (DGS). In addition,
DND performs several public tasks relating to coins. It is also responsible for banking
supervision and ensuring an effective payment system in the islands of Bonaire, St
Eustatius and Saba (the Caribbean Netherlands). In respect of its supervisory,
resolution and DGS tasks, DND is an independent public body, largely governed by the
Independent Public Bodies Framework Act.”
Banking Regulations of Netherlands:
The legal framework in The Netherlands for banks is predominantly included in the
Dutch Financial Supervision Act (FSA). The FSA are as follows :
1.
The FSA consists of the following parts:
1. General Provisions, including tasks and responsibilities of the regulatory
authorities together with their supervisory powers and the rules on their co-
operation.
2. Market access of financial undertakings, setting out requirements in relation to
authorizations for financial undertakings wishing to operate in The Netherlands.
3. Prudential supervision of financial undertakings, including the prudential
standards which must be met by financial undertakings.
4. Specific measures regarding financial undertakings.
5. Conduct of business supervision of financial undertakings, providing for various
conduct of business requirements applicable to financial undertakings

Regulatory authorities:

Prudential supervision in the Netherlands is primarily carried out by the banker’s bank
As a result of the EU Banking Union supervision on banks is also conducted by ECB.
This is addition to conduct supervise carried out by the Dutch authority for the Financial
Markets.
The lead bank regulators are the:
1. European Central Bank (ECB).
 As a result of EU Banking Union, the ECB is supervision authority for all the banks with a

seat within the euro currency area. This has significant changed the role of DND. The

ECB now conducts supervising on significant Dutch banks such as ABN AMRO Group,

ING, Cooperative Rabobank.

Regarding other less significant Dutch bank DND remains the supervisory over others

ECB decides on approvals for banking licenses and declaration of no objection.so far it

appears that ECB is more formalistic and more data driven than DND.

2. Dutch Central Bank (The Netherlands Bank) (DND).

It is responsible for undertaking of financial undertakings,

Its also handles the anti money laundering and anti terrorist financing act by financing

undertaking standing under its prudential supervision.

DND assesses and enforces the adequacy of the procedures and measures

implemented by financial undertakings to combat money laundering and terrorist

activities

DND is less data driven but more governance driven.

3. Dutch Authority for the Financial Markets (AFM).

It is responsible for the activities related to business of all financial undertakings that are

active on the Dutch financial market

Conduct supervision focuses on ensuring orderly and transparent financial market

processes and the exercise of due care in dealings with clients by financial undertakings.

The AFM is also responsible for the approval of prospectus, market abuse supervision

and matters regarding the trading infrastructure.

 The AFM is strict supervision authority that is not reluctant to impose formal measures

such as fines or orders subject to a penalty when the proper treatment of consumer is at

stake.

Types of Banking Services:

1. Retail Banking

2. Corporate Banking

3. Investment Banking

4. Private Banking

5. Personal Banking

6. Insurance

7. NRI Banking

8. Loans
Number of Banks Operating in Netherlands:
“This statistic shows the total number of banks in the Netherlands from 2008 to 2017. At
the end of 2017 there were 44 banks in the Netherlands. Banking is unimportant service
industry in the Netherlands, being responsible for the funding of both international as
well as domestic
In 2016, for example, the five largest Dutch credit institutions, which includes the likes of
ING, Rabobank and ABN Amor, held approximately 85% of the total assets. Secondly,
the Dutch banking sector is one of the most important central bank

In the period between 2008 and 2017, the total number of banks in the Netherlands
increased from 93 banks in 2007 to 44 banks in 2016. In this period of time, the size of
the banking sector as a whole in the Netherlands, for example, reached a total number
of approximately 3,400 in 2008. In 2017, this was around 1,600.

Leading Banks in Netherlands:

This statistic shows the leading banks in the Netherlands as of January 2019, by
number of bank branches. In January 2019, SNS Bank had the fourth-most number of
offices, with approximately 200. In the period between 2007 and 2016, the total number
of banks in the Netherlands from 99 banks in 2007 to 50 banks in 2016.