Legal and institutional framework
Cooperative Credit in our country actually began to develop in Greece in 1993 based on Law 2076/92 by which the provisions of the Second Banking Directive of the Council of the European Community 77/78 were incorporated into the Greek Banking Legislation. Over the years, Law 2076 was supplemented, amended and finally in 2007 it was replaced by Law 3606 (Official Gazette A’ 195 / 17.8.07).
Based on the current legislation and the institutional framework, the Cooperative Credit Institutions are Urban Credit Cooperatives of Law 1667/86 which, after collecting the minimum capital and fulfilling the necessary conditions, receive a Credit Institution operating license from the Bank of Greece, following their request and carry out all the banking operations that are the object of activity of Commercial Banks.
Credit Cooperatives that receive a license to operate as a Credit institution do not change their legal personality and are allowed to use the term “Cooperative Bank” in their name
It is worth noting that the amount of the required minimum capital has been adjusted 4 times in recent years to levels that do not correspond to the economic and population data of many Prefectures of our country, making it difficult in practice both the creation and the evolution of Credit Cooperatives into Banks. Thus, the 1.76 million € (PD/TE 2258/2.11.1993) that was initially foreseen for the operation at the prefecture level became, in accordance with PD/TE 2413/9.7.97 and 2420/12/9/97, 2 .64 million € from 1.1.98 and from 1.7.98, 3.52 million €. Subsequently, with PD/TE 2471/10.4.2001, the minimum capital for operation at the prefecture level increased to €6 million, at the Region level to €10 million, while for the Territory and/or abroad, €18 million is required. Finally, with Act No. 201/1.3.22 of the Executive Committee of the Chamber of Commerce, the operation at Prefecture level is abolished from 1.1.23 and the minimum required capital starts from €10 million
Cooperative Banks deal with their members with other credit institutions, as well as with the Greek State. They carry out all banking operations except underwriting. Upon approval by the Board of Directors and under the more specific terms and conditions that it may set on a case-by-case basis, they may also transact with non-members.
The above limitation is not subject to transactions: (i) of any kind when a member of the Bank also participates, as well as (ii) those concerning secondary banking transactions of an intermediary nature.
Structure – Function
Today, a total of 6 Cooperative Banks operate, of which 5 operate at the District level and 1 has a license to operate at the Territory level.
At the same time, 2 Credit Cooperatives operate which, apart from the efforts to evolve into Cooperative Banks, are active by granting loans or other financial facilities to their members.
Cooperative Banks and Credit Unions have established the Union of Cooperative Banks of Greece (ΕΣΤΕ) which is the body for the representation, support and development of Cooperative Credit in our country.
The Cooperative Banks in their short period of operation have played an important role at the local level by intervening in a complementary and improving way in the banking system by establishing a new type of Bank that is distinguished by its customer-centric concept, that supports and is supported by the local productive forces and strengthens local development.
They are aimed mainly at Small and Medium Enterprises (SMEs) and natural persons, with competitive banking products adapted to local conditions and with operating characteristics that establish them as reliable, friendly, flexible and social Banks.
The customers – members of the Cooperative Banks are treated on a basis of trust and long-term prospective cooperation, elements that contribute to the continuous upgrading of the provided banking services and products.
The decentralized structure of Cooperative Banks strengthens the personal relationship between the client and the Bank, increases efficiency and, in combination with low operating costs, modern computerized systems, the positive financial results and benefits they achieve for their members (dividend, share capital, transaction profit) gain the trust of local communities and create conditions for dynamic development and perspective.