Put briefly, unless an authorisation, release or exemption has been granted, it is prohibited:
- to carry on the business of a credit institution (banking business) in the Netherlands;
- to invite redeemable funds from the public in the course of a business, or to act as a broker for this;
- to use the word ‘bank’.
If DNB finds that the prohibitory provisions have been breached, it can take measures. DNB can impose a cease and desist order on the party in breach, for example an order to end the breach and to repay the funds invited. If the party in breach does not comply with the order within the time set, it forfeits the penalty and has to pay it to DNB. DNB can also impose an administrative fine on the party in breach. DNB can make public the imposition of a cease and desist order or administrative fine.
In the case of an ‘illegal’ credit institution, in certain circumstances DNB can apply to the court to grant a special order against the party in breach, in the interests of the creditors. If this application is granted, an administrator is appointed who tries to liquidate the loans as far as possible.
Finally, DNB can report the matter to the Public Prosecutions Department (Openbaar Ministerie), as a failure to comply with these prohibitory provisions is also a criminal offence under the Economic Offences Act (Wet op de economische delicten).