Banking license

In most legal jurisdictions, a financial institution is required to obtain a banking license (or banking licence in Commonwealth spelling) before it is legally permitted to carry on a banking business. Besides other requirements, such a business is not permitted to contain in its name words such as bank, insurance, national, etc, unless it holds an appropriate license. Depending on banking regulations, jurisdictions may offer different types of banking licenses, such as:

• full banking licenses for general banking activities, such as taking deposits from the general public
• international banking licenses (offshore banking licenses), which prohibits any local business activities
• non-banking financial institution (NBFI) is an institution that provides financial services but has to comply with fewer regulations than one with a full banking license.