Czech National Bank to Gain Expanded Powers Under New Banking Sector Reform
Prague, The Gulf Observer: The Czech National Bank (ČNB) is poised to receive enhanced regulatory authority over the country’s banking sector following the passage of a significant government bill by the Chamber of Deputies. The legislation, aimed at reinforcing financial stability and aligning Czech regulations with European Union standards, will now proceed to the Senate for approval.
Under the new law, banks will be required to notify the ČNB in advance of any planned changes to their statutory bodies and supervisory boards — a move designed to ensure greater transparency and oversight of leadership structures within financial institutions.
The bill also tightens conditions for foreign bank branches operating in the Czech Republic, particularly those headquartered outside the European Union. These institutions will face more rigorous regulatory scrutiny, in line with broader efforts to mitigate potential systemic risks.
In a notable shift reflecting evolving international standards, the legislation mandates that banks incorporate environmental, social, and governance (ESG) risks into their internal management strategies. This requirement underscores the growing importance of sustainable finance and risk-aware governance within the financial system.
If endorsed by the Senate, the new regulations are scheduled to take effect in January 2026. The Ministry of Finance has welcomed the reform as a step forward in bolstering the resilience and integrity of the Czech banking sector.
