Credit Institutions

Credit institutions are entities licensed to operate under the Banking Act, Chapter 371 of the Laws of Malta. According to the Banking Act, a credit institution can undertake a number of activities which are specified in the same Act. The taking of deposits from retail customers is the licensable activity that distinguishes a credit institution from other licensed entities.

The supervisory objectives of the Authority in relation to credit institutions are primarily aimed at protecting depositors. The Authority is committed to ensure that licensed credit institutions are compliant with the statutory requirements. To this end, the Authority uses a range of techniques and tools as it employs a mix of ongoing and onsite supervisory activities. The Authority looks at the business of credit institutions in terms of the risks faced by the institutions themselves and those that could arise from general instability in the financial market. When required the Authority introduces and implements qualitative and quantitative supervisory measures. The risk-based approach applied by the MFSA is consistent with international standards of supervision. The approach is intended to take into consideration capital, the nature of the business activities, internal controls and quality of management of licence holders.

The remit of the MFSA in the credit institution sector takes into account Council Regulation (EU) No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions. This Regulation led to the setting up of the Single Supervisory Mechanism (SSM) in 4 November 2014. In this sense, the MFSA’s regulatory activity includes the ongoing supervision of the three Significant Institutions (SIs) carried out by ECB/MFSA Joint Supervision Teams (JSTs).

The regulatory activities of the MFSA also include the ongoing supervision of Less Significant Institutions (LSIs), general On-Site responsibilities as well as supervisory reporting.

Main Legislation & Subsidiary Legislation

This includes a list of main legislation, subsidiary legislation and related legislation in relation to Credit Institutions.


Article 4(6) of the Banking Act specifies that the competent authority may make, amend or revoke Banking Rules as may be required for carrying into effect any of the provisions of the Act and any regulations made thereunder…

Supervisory Disclosure

The purpose of supervisory disclosures is to enhance transparency of supervisory practices. Transparency is a key element in effective banking supervision, as emphasized by the Basel Committee on Banking Supervision in its Core Principles on Effective Banking Supervision…

Circulars and Notes for Information

Includes a list of all circulars and notes for information issued throughout the past months and years in relation to ‘Banking Supervision’…