Parliament on July 9 gave final approval to amendments to the Credit Institutions Act, transposing two EU directives into Bulgarian law, one of which has already prompted the European Commission to launch infringement proceedings against Bulgaria.
The amendments strengthen requirements concerning the independence of employees and members of the Governing Council of the Bulgarian National Bank (BNB), as well as the assessment of the fitness and propriety of members of banks' management bodies and key office holders. Under the new rules, no member of a bank's management body, except a governor appointed after January 11, 2026, may remain in office for more than 14 years.
The legislation also introduces additional transparency requirements for BNB officials involved in banking supervision. Members of the Governing Council and relevant BNB employees will be required to submit declarations of interests, including information on assets and financial holdings that could give rise to conflicts of interest.
The amendments harmonize notification requirements and supervisory powers relating to prudentially significant transactions and update the licensing framework for branches of banks from third countries operating in Bulgaria. Banks headquartered outside the EU will be required to obtain a BNB licence to operate through a Bulgarian branch. The requirement will not apply to contracts concluded before July 11, 2026.
The legislation also introduces periodic financial penalties for continued non-compliance with legal obligations or supervisory decisions. Such penalties may be imposed for up to six months. Institutions may be fined up to 5% of their average daily net turnover, while members of management and supervisory bodies, senior executives and key office holders may face periodic penalties of up to EUR 50,000.
The provisions concerning branches of third-country banks will enter into force on January 11, 2027.