Table I Main Elements of the Portuguese Banking Legislation – General Capital Interest Rates Cash Reserves Operations Credit Stock/Bonds Entry in market Mergers & Opening of Conditions Requirements holdings Acquisitions Branches 50 million Interest on Equal to at Forbidden to Forbidden to Dependent on Dependent on Dependent on escudos in demand least 15% of grant credit acquire stock authorisation by authorisation authorisation by Decree-Law 42,641, Lisbon and deposits: 50% demand above 10% of of another firm the Minister of by the Minister the Minister of 12th November 1959 Porto, and 20 of the Banco de deposits and of the bank’s in more than Finance. of Finance. Finance. million outside Portugal’s time deposits capital plus the the reserve of the two cities rediscount rate. of less than reserve fund to fund plus 20% for opening Interest on one month; one single firm of the capital banks; 30 loans: not more and 5% of time or individual. of the bank; million escudos than 1.5% deposits of This limit was and could not for above that more than one raised to 30% exceed 20% of incorporated same month, with if the collateral the capital of banks already rediscount rate. the remaining was the firm. functioning in No limits on 85% backed by constituted of Lisbon or Porto, time deposits credit public bonds; and 10 million until 1965 instruments of and to 20% if it for those (Decree-Law no more than had the form functioning 46,492, 18 three months’ of bank outside the two August): 1.25% maturity and guarantees. cities; 10 million for time no less than escudos for deposits of less one year (slight than one changes until month; 2.5% for 1973, Valério, banks in Lisbon time deposits org., 2010) and Porto; 5 between 30 million outside days and 90 of the two cities days; 3.5% for deposits between 90 days and one year. Decree-Law 132-A/75, Nationalisation of commercial 14 March 1975 banks Decree 644/75, 15 Set by the Bank Set by the Bank of Portugal of Portugal November 1975 General Capital Interest Rates Cash Reserves Operations Credit Stock/Bonds Entry in market Mergers & Branches Conditions Requirements holdings Acquisitions
Table I – Main Elements of the Portuguese Banking Legislation General Conditions Capital Requirements Interest Rates Cash Reserves Operations Credit Stock/Bonds holdings Entry in market Mergers & Acquisitions Opening of Branches Decree-Law 42,641, 12th November 1959 50 million escudos in Lisbon and Porto, and 20 million outside of the two cities for opening banks; 30 million escudos for incorporated banks already functioning in Lisbon or Porto, and 10 million for those functioning outside the two cities; 10 million escudos for banks in Lisbon and Porto; 5 million outside of the two cities Interest on demand deposits: 50% of the Banco de Portugal’s rediscount rate. Interest on loans: not more than 1.5% above that same rediscount rate. No limits on time deposits until 1965 (Decree-Law 46,492, 18 August): 1.25% for time deposits of less than one month; 2.5% for time deposits between 30 days and 90 days; 3.5% for deposits between 90 days and one year. Equal to at least 15% of demand deposits and of time deposits of less than one month; and 5% of time deposits of more than one month, with the remaining 85% backed by credit instruments of no more than three months’ maturity and no less than one year (slight changes until 1973, Valério, org., 2010) Forbidden to grant credit above 10% of the bank’s capital plus the reserve fund to one single firm or individual. This limit was raised to 30% if the collateral was constituted of public bonds; and to 20% if it had the form of bank guarantees. Forbidden to acquire stock of another firm in more than the reserve fund plus 20% of the capital of the bank; and could not exceed 20% of the capital of the firm. Dependent on authorisation by the Minister of Finance. Dependent on authorisation by the Minister of Finance. Dependent on authorisation by the Minister of Finance. Decree-Law 132-A/75, 14 March 1975 Nationalisation of commercial banks Decree 644/75, 15 November 1975 Set by the Bank of Portugal Set by the Bank of Portugal General Conditions Capital Requirements Interest Rates Cash Reserves Operations Credit Stock/Bonds holdings Entry in market Mergers & Acquisitions Branches
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