Banking services: the TUB and the CRD VI branch requirement

Deposits, loans and the old regime of Article 16 TUB

Investment services are only part of what a Lugano bank provides to an Italian client. The relationship usually begins with an account, which in legal terms is the acceptance of a deposit. It often includes a Lombard loan secured on the portfolio, a mortgage on a holiday flat in Ticino or a property in Italy, a guarantee for a business of the family, and payment and foreign exchange services. These activities are banking activities under the TUB and under European banking law. Until the end of 2026 they are governed by a regime that has been comparatively liberal towards third-country banks.

The basic rule is Article 16 TUB on the free provision of services. Paragraph 4 provides that banks of third countries may operate in Italy without establishing branches after a communication to the Banca d'Italia and subject to the conditions that the Banca d'Italia sets, and the Banca d'Italia may prohibit or stop the activity if the conditions are not met.¹ The establishment of a branch by a third-country bank is subject to authorization under Article 14 TUB. In practice Swiss banks that served Italian clients from Lugano did not seek authorization for banking services. They relied on the view that an account opened in Switzerland at the request of a client who came to Switzerland, and a loan granted in Switzerland against Swiss collateral, did not amount to the exercise of banking activity in Italy. The criminal provisions on abusive banking support this reading to a degree. Article 130 TUB penalizes unauthorized deposit-taking from the public, and Article 131 TUB penalizes anyone who takes deposits from the public in breach of Article 11 and also grants credit, with imprisonment from six months to four years and a fine.² Both offences presuppose activity carried on in Italy, and an Italian prosecutor would have to prove that the Swiss bank had taken deposits from the public in Italy.

CRD VI and Article 21c

The European Union decided in 2024 to close this gap. Directive (EU) 2024/1619 of 31 May 2024 (CRD VI), published in the Official Journal on 19 June 2024, amended the Capital Requirements Directive 2013/36/EU and inserted a new Article 21c. Under paragraph 1, Member States must require undertakings established in a third country to establish a branch in a Member State, authorized in accordance with Union law, before they provide core banking services in that Member State. Core banking services are the acceptance of deposits and other repayable funds, lending and the issue of guarantees and commitments, as listed in points 1, 2 and 6 of Annex I CRD.³ The directive thereby harmonizes, for the first time, the conditions on which banks from outside the Union may serve clients inside it.

Paragraph 2 of Article 21c contains exemptions. The branch requirement does not apply to interbank and interdealer transactions or to investment services and activities under MiFID II, together with their ancillary services, which remain governed by the MiFID regime described above. Paragraph 3 exempts reverse solicitation: the requirement does not apply where a client or counterparty in the Union approaches the third-country undertaking at its own exclusive initiative. Paragraph 4 enables competent authorities to monitor cross-border provision to prevent circumvention, and paragraph 5 allows Member States to protect contracts concluded before 11 July 2026. Paragraph 6 states that the anti-money laundering rules remain applicable in any event.⁴ The directive applies from 11 January 2026, and Article 21c applies from 11 January 2027.

Notes

1. TUB (Legislative Decree No. 385 of 1 September 1993), Art. 16 para. 4, text and annotation at Brocardi.it, https://brocardi.it/testo-unico-bancario/titolo-ii/capo-ii/art16.html. ↩
2. TUB, Art. 131, text at Brocardi.it, https://www.brocardi.it/testo-unico-bancario/titolo-viii/capo-i/art131.html (imprisonment from six months to four years and a fine stated in the original text as four to twenty million lire); Art. 130 TUB, https://www.brocardi.it/testo-unico-bancario/titolo-viii/capo-i/art130.html (arrest from six months to three years and a fine stated as twenty-five to one hundred million lire). ↩
3. Directive (EU) 2024/1619 of 31 May 2024, OJ L of 19 June 2024, Art. 1 inserting Art. 21c into Directive 2013/36/EU, https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202401619. The reference to points 1, 2 and 6 of Annex I CRD is confirmed by the Italian transposition (below). ↩
4. Directive (EU) 2024/1619 (above), Art. 21c para. 2–6 and recital 6 ("The requirement to establish a branch in the Union should not apply to cases of reverse solicitation, that is where a client or counterparty approaches an undertaking established in a third country at its own exclusive initiative"). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.