Minimum requirements for the lending business

The minimum requirements for the lending business of credit institutions (MaK) introduced by the Federal Financial Supervisory Authority (BaFin) with its circular 34/2002 (BA) of December 20, 2002 applied to all credit institutions in Germany from June 30, 2004. The aim of the MaK was to limit the banks' risks from the lending business . The MaK was replaced by the BaFin circular 18/2005 of December 20, 2005 by the minimum requirements for risk management (MaRisk).

The MaK stipulated regulations on the following subject areas:

1. General requirements

   • Management responsibility
   • Credit risk strategy
   • Organizational guidelines
   • Qualification of employees
   • Loan transactions in novel products or in new markets
   • Documentation requirements

2. Organization of the credit business

   • Segregation of duties
   • Voting credit decisions
   • Requirements for the processes of ...

   • Granting credit
   • Loan processing
   • Loan Processing Control
   • Intensive care
   • Handling problem loans
   • Risk provision

3. Risk classification procedure
4. Identification, control and monitoring of risks in the lending business

   • General requirements for the procedure (s)
   • early warning system
   • Limiting the risks in the lending business
   • Reporting
   • Legal and operational risks

5. Outsourcing
6. exams

   • Revisions
   • Auditor