Banking secrecy

What it means

Banking secrecy is a bank's duty to keep confidential everything concerning its clients: the existence and balances of accounts, payments made, loans, deposits and items held in safekeeping. It is governed by the Banking Act and binds bank staff even after they leave.

Banking secrecy is not absolute. The law lists the bodies to which a bank must disclose data, such as courts, enforcement officers, tax offices, the police, the financial intelligence unit and the National Bank of Slovakia.

Tax secrecy provides similar protection for data held by tax offices. Both protect business privacy but must not obstruct the detection of crime or the collection of debts.

How it works in practice

Companies typically encounter banking secrecy in enforcement proceedings or tax enforcement, when the bank reports balances to the enforcement officer and freezes the account. The company usually only learns of it from the account freeze.

During a tax audit the tax office may request statements for the audited company's accounts from the bank. It is therefore important that bank statements agree with the books and every payment has a document.

A company can release the bank from secrecy itself, for example to let the bank share data with its accountant, auditor or a statement import app. This is done by written consent or through open banking.

What to watch out for

Banking secrecy offers no protection from anti-money laundering obligations. Banks must report unusual transactions without telling the client, so explanations for large payments are best prepared in advance.

If a company gives its accountant or another provider access to its account, permissions should be limited to read-only. Full rights to enter payments increase the risk of misuse and errors.