Banking license passporting is the banking-specific case of passporting, the European mechanism that lets a firm authorised in one member state operate across the European Economic Area on the strength of that single authorisation. The main entry covers all types of passport; this page explains what the term means for banks.
A bank authorised as a credit institution under the EU Capital Requirements Directive can use its home licence to set up branches in other EEA countries, or to provide services across borders without a branch, after notifying its home supervisor, which passes the notification to the host state. The host country cannot require a separate banking licence for passported activities, although it keeps some powers over conduct and local rules. Subsidiaries are different: a subsidiary is a separate legal entity and needs its own authorisation.
The term became widely used during Brexit. When the United Kingdom left the EU single market at the end of 2020, UK banks lost their passports and many moved activities to subsidiaries in cities such as Dublin, Frankfurt and Paris, while EEA banks in London entered a temporary permissions regime overseen by the Prudential Regulation Authority. Payment firms use a similar passport under the PSD2 regime, described under payment institution licence.