In the Czech Republic, banking supervision is both a material and institutional part of the Czech National Bank. The CNB´s supervisory rights and duties are set forth in the CNB Act and the Act on Banks.
Under these laws, CNB Banking Supervision:
- grants banking licences;
- issues regulations ("provisions" and "decrees") defining the prudential rules for banks;
- monitors the activities of banks, foreign bank branches and credit unions;
- performs examinations (inspections) in banks, including foreign bank branches and credit unions;
- grants prior consents in accordance with the Act on Banks, e.g. to the acquisition of a holding in a bank, the sale of a bank´s business, the merger of a bank, the winding up of a bank, or the termination of banking activities;
- imposes remedial measures and penalties for shortcomings detected in banks´ activities;
- decides on the imposition of conservatorship and the revocation of banking licences.
However, CNB Banking Supervision is not entitled to interfere in a bank´s commercial decision-making and management; this is the exclusive preserve of its managers and supervisory board. The CNB merely endeavours - by means of its prudential rules, along with rigorous off-site and on-site inspections and appropriate remedial measures - to steer the activities of banks in such a way as to prevent anything that could harm the interests of their clients and endanger the stability of the banking system as a whole.