meta_id 3352719

On July 24, 2026, Bulgaria's Official Gazette published Decree No. 233 from July 20, 2026, by which President Iliana Yotova promulgated amendments to the Law on Credit Institutions, adopted by the 52nd National Assembly on July 9, 2026. The amendments, which transpose Directive (EU) 2024/1619 and Directive (EU) 2024/2994, introduce significant changes to Bulgaria's banking regulatory framework. Key amendments establish a new supervisory structure for third-country branches, implementing categorization into Category 1 and Category 2 branches based on asset thresholds and deposit-taking activities. Category 1 branches must maintain minimum guarantee capital of 2.5 percent of average liabilities (minimum 10 million euros), while Category 2 branches must maintain 0.5 percent (minimum 5 million euros). The amendments introduce enhanced requirements for branch governance, including independent management committees for significant branches and mandatory registration of assets and liabilities. The law creates comprehensive provisions for merger and division procedures, establishing detailed evaluation criteria and procedural requirements for banking consolidations. New rules address environmental, social, and governance (ESG) risk management, requiring banks to assess climate-related and sustainability risks across short, medium, and long-term horizons. The amendments introduce periodic financial sanctions as enforcement tools, allowing regulators to impose daily penalties up to 5 percent of average daily net turnover to compel compliance with regulatory obligations. Significant governance enhancements include restrictions on board members' financial instrument trading, mandatory interest conflict declarations, and cooling-off periods for supervisory personnel transitioning to regulated entities. The amendments expand the Bulgarian National Bank's (BNB) supervisory powers over third-country branches, including authority to require their conversion to subsidiary status under specified conditions. Enhanced coordination mechanisms establish supervisory colleges for significant third-country branch groups operating across multiple European Union member states. The amendments become effective on January 11, 2027, with certain provisions regarding third-country branches and specific supervisory measures taking effect on that date. Transitional provisions allow existing third-country branch licensees until January 10, 2027, to demonstrate compliance with new requirements.