There is no definition of “parabank” in Polish law. Very often, loan companies are written as parabanks. This is wrong and unfair for these companies, despite the fact that they provide financial services that are not banking services.
“Parabanks” are written in the context of entities that run their ordinary business, but without being banks, they accumulate clients’ money by promising them large profits. Certainly they are financial pyramids – they do not carry out activities that would bring such high profits, as they promise in advertisements, and “interest” to customers pay out of payments of new customers.
Do loan companies operate in this way? Of course not. They do not accept “deposits” from customers, and they grant loans from their own capital. Certainly there are dishonest entities in this segment, but it is impossible to generalize and identify reliable and reliable loan companies as ” parabank u”.
In the Act of 31 January 1989 Banking Law, Chapter 10, Art. 115 [Conducting activities contrary to the conditions set out in the Act] is the entry:
1) without being entitled to do so, conducts gainful activity consisting in taking savings deposits of the population or term deposits in order to grant credits or loans or using these means in another way or
2) when running a gainful activity against the conditions specified in the Act, uses in the name of an organizational unit that is not a bank and to determine its activity or advertising the words “bank” or “cash”
- is punishable by imprisonment of up to 3 years or restriction of liberty. “
Banks are subject to Banking Law and are controlled by the KNF
Banking law defines activities that can be performed only by banks, that is institutions regulated by special regulations and controlled by the Polish Financial Supervision Authority. And only banks (and credit unions) can provide loans.
In loan companies, we will not get a loan, but a loan. Therefore, these are LOAN companies, not CREDIT companies.
Such companies may provide cash loans to their clients, but they may not receive cash contributions from them. They can even associate lenders with borrowers (but here you should pay particular attention to issuing shares and stocks due to the practice of “pulling” customers on expensive premium phone calls).
Should KNF also supervise loan companies? It seems that there should be no supervision by the KNF, because too much interference by the state in the independence of running a business would eliminate such companies from the official market. It seems that the non-banking market in the cash loans sector is now sufficiently protected by law.