On November 4, 2025, the Council of Ministers adopted a draft deregulation bill concerning the functioning, association, and umbrella institutions of cooperative banks in Poland. This is the latest step in a series of legislative changes aimed at reducing administrative burdens for the financial sector, especially for institutions that operate at the local level. The proposed bill is expected to streamline regulations, cut bureaucracy, and enhance internal support mechanisms within the cooperative banking protection systems.
Reduced Formal Burden and Greater Flexibility in Associations
One of the key elements of the reform is the simplification of membership agreement modifications in cooperative bank associations. Until now, each change in membership requirements required individual annexes to be signed by all participants. The amendment eliminates this obligation—changes can instead be introduced through a multilateral agreement between the umbrella bank and all associated institutions, without the need for individual annexes each time. This significantly reduces administrative time and costs and makes daily operations within associations more efficient.
The proposal also removes the requirement for banks to submit information to the Polish Financial Supervision Authority (KNF) regarding liabilities toward shareholders for five years after membership termination. Banks will also no longer be obliged to store such records. This represents a meaningful reduction in reporting obligations.
Sub-participation as a Faster Support Mechanism
The amendment will also allow protection system operators and umbrella banks to enter into sub-participation agreements—a tool previously used mainly by larger institutions to transfer credit risk to a financing party. Introducing this instrument to the cooperative sector is expected to accelerate and simplify liquidity support procedures for cooperative banks in need. Previous practice has shown that the lack of such solutions often delayed support processes and generated high procedural costs.
Level Playing Field in Credit Consortia
Another important change is the standardization of participation rules for cooperative banks in credit consortia. Existing regulations favored certain entities, potentially discouraging participation in large financing projects. The introduction of uniform conditions will enable cooperative banks to more effectively collaborate with other financial institutions on large loans, thereby expanding funding opportunities—especially for investment projects with local relevance.
New Management Structure in Associations
The revised law also introduces a new decision-making body within cooperative bank associations: the Assembly of Presidents. Until now, the only formal body was the association’s council, which primarily held advisory powers. The new assembly will make key management decisions, enhancing member banks’ representation within governance structures. According to lawmakers, this is intended to foster more democratic decision-making processes.
Simultaneously, the bill removes legal provisions regarding the so-called “integrated association” model, which was never implemented in practice. Its presence in law was merely theoretical and contributed unnecessary legal complexity.
Financial Transparency and Accounting Alignment
The reform also clarifies accounting rules for protective fund systems and the stabilization fund of the National Association of Cooperative Savings and Credit Unions (KSKOK). The objective is to enhance financial transparency and streamline the execution of safety functions—both of which are critical to the stability of the cooperative banking sector.
The bill is set to take effect 14 days after publication in the Journal of Laws, which means the cooperative banking sector will soon face the task of implementing several organizational and procedural changes.
Source: CEO.com.pl
