Five steps to start up a bank

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Five steps to start up a bank -  I’ll start with a comment, I consider important in order to call the attention of those who really want to start up a bank in Brazil: Regardless of the bank’s type, it is not enough to wish or even to have a big net worth for starting up a bank. On the other hand, I am not saying it is too complicated either. The readiness is all, as Shakespeare used to say. In addition to have to obey to a rigid regulatory demand, to be wealth enough and to have a skilled team, you also need a business plan very well done. To hire the team is not that complicated, although some positions might have higher salaries compared to certain industries. A well done business plan based on the Central Bank’s needs is considerably more complicated because you need to prove your project will work out and generate profit as a result.

Step 1: Read carefully all the legislation about the subject. There are two basic phases to be considered: establishment and authorization to operate;

Step 2: Develop a business plan. This is a very important step and should be considered critical. The tenor of your project in BACEN (Brazilian Central Bank) to be approved, will vary considerably depending on the quality of your business plan and the interlocutor whom will be negotiating and clarifying details for the annalists. By the way, they have eagled eyes that see certain details on the project, which will be necessary to be justified.

Step 3: Establishment: you should file an initial application with BACEN–DEORF accompanied by a Draft Statement of Purpose (DSP). DEORF shall examine the intended corporate name and the contents of the DSP, as the case may be. In case there are no hindrances to the intended corporate name and the contents of the DSP, you publish the DSP according to legislation provided under SISORF. You should complete the proceedings for establishment by providing the documents foreseen in SISORF within ninety calendar days from the filing of the initial application.

On this phase, you should also nominate a person, technically able, in command of conducting the proceedings. Such person is not responsible for discussing formal issues related to the proceedings. He or she shall display technical ability to discuss the whole enterprise project, especially in what relates to the business plan, economic and financial feasibility analysis and standards of corporate governance of the future institution. It is
highly recommended that this person is exceedingly experienced within the financial market because it will facilitate the relationship between the intended institution and BACEN.

Furthermore, on this phase they will deeply examine the requirements of good character, personal and financial history of controlling shareholders. After the application is analyzed, BACEN shall communicate its decision to you. In case of a favorable decision, you will have ninety days from the receipt of the related decision to formalize its request for authorization to operate.

Step 4: Phase of authorization to operate: you should formalize the request for authorization of the society to BACEN followed by corporate acts for the establishment of the society; approved bylaws; acts of election and any other documentation requested by BACEN.


After the internalization of the institution’s capital, you have five days to deposit through any bank the whole amount in BACEN. The amount of money deposited will be blocked during the analyses of your request. After you receive the authorization to operate, they will give it back to your financial institution.

Step 5: Now that you already have your bank authorized to operate, your mind shall think differently. Why? You should exercise your sense of urgency because you need to immediately register the bylaws, and the authorized bank, even though not being fully operated yet, has fiscal and regulatory obligations. Get ready to operate!

If you have surpassed all these steps above, we congratulate you. However, there come the most difficult phase which is to make money. Our focus here was not to explore the nuances of the structuring and operational details to operate the bank, but many are the critical issues you should consider and be aware of, related to human resource, accounting, IT, products and services, credit policies, sales force and many others. It supposes that you have already discussed these subjects previously in your business plan.

I end up saying, if you know what you want and are wealthy enough, though you are coming from other industries, initiate your bank thinking as a banker, and you will have a bank in excellent conditions to operate.

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Sao Paulo, July 25, 2010