Navigating the complexities of CRD VI: Recent EBA Report on the scope of the Article 21c Interbank Exemption

On 23 July 2025, the European Banking Authority (“EBA”) published its report on the scope of the interbank exemption (the “Interbank Exemption”) in Article 21c of CRD VI (the “EBA Report”).

In its report, the EBA considers whether the Interbank Exemption should be extended to other EU financial sector entities such as investment firms, asset management companies, payment service providers (“PSPs”) and insurers (each an “EU FSE”).

In summary, the EBA says there is insufficient evidence from market participants to justify expanding the scope of the Interbank Exemption to other EU FSEs. Whilst market participants may have been hoping for an expansion of this exemption to a wider set of entities, the EBA Report at least gives some certainty where banks were delaying elements of their programme pending publication of this report.

Firms will also need to consider the practical implications of the EBA Report, including on their existing CRD VI impact assessments and programme assumptions. Deloitte’s key observations from the report and potential practical implications are considered below.

Background

• Article 21c CRD VI specifies when non-EU firms must establish an EU branch to provide core banking services to EU clients where a subsidiary has not already been established. “Core banking services” include deposit-taking and lending.
• The requirement to establish an EU branch does not apply where a non-EU firm can rely on an exemption. There are several exemptions in Article 21c including for intragroup activity, interbank activity and reverse solicitation. CRD VI also contains a grandfathering regime which applies to contracts entered into before 11 July 2026.

Six key observations and points for firms to consider

We have six key observations from the EBA Report:

1. The entity scope of the Interbank Exemption remains unchanged: The EBA says there is insufficient evidence from market participants to justify expanding the scope of the Interbank Exemption to other EU FSEs. The current exemptions in Article 21c are considered adequate.
2. Custody: The EBA Report considers custody services provided by non-EU global custodians, including via sub-custody arrangements. The EBA confirms that core banking services directly related to custody are not caught by Article 21c. This is because of a carve-out for core banking services that are ancillary to MiFID business. Standalone lending and deposits will generally trigger Article 21c (unless they can rely on another exemption such as reverse solicitation).
3. Clearing of US Dollar (“USD”) payments in respect of non-bank EU PSPs: Non-bank PSPs are not credit institutions covered by the Interbank Exemption. Whilst clearing is not a core banking service, it can normally only be provided in conjunction with deposit-taking. The EBA recognises that clearing USD payments requires direct access to US payment infrastructure, which only US financial entities can provide. However, the EBA said there was insufficient evidence that this issue justified an expansion of the Interbank Exemption, noting (amongst other things) that non-EU PSPs typically have a licensed credit institution within their EU group. The EBA does not comment on the practical and operational issues that may arise as a result of such changes.
4. Insurance companies and reliance on non-EU firms to access non-EU markets: The EBA considers concerns about the impact of Article 21c on the treasury and liquidity operations of international insurance groups. Whilst these concerns were raised by the insurance sector, they are likely to be of wider relevance – e.g., for EU multinationals that operate non-EU payroll or are required to make non-EU tax payments in the ordinary course of their international business. The EBA’s view is there is insufficient evidence of negative impacts to justify extending the Interbank Exemption to insurance and reinsurance entities. The EBA notes that large international banking groups have EU subsidiaries or branches that could service the EU subsidiaries or branches of insurance groups. The EBA does not address any arguments about client identity or whether a non-EU member of a client group can carry out reverse solicitation on behalf of its EU affiliates.
5. Transactions with EU SPVs: The EBA notes that special purpose vehicles (“SPVs”) are not EU FSEs and therefore fall outside the EBA’s mandate. However, the EBA notes that, in general, many international banking groups have EU subsidiaries and/or branches that could provide financing to EU SPVs. The EBA Report does not consider if and how the analysis may change where a bank’s client, in practical terms, is a non-EU decision-maker. For example, where the bank only speaks with (and takes all instructions from) a non-EU financial institution and has no or little contact with either the SPV or anyone in the EU Member State in which the SPV is located.
6. Ability of EU funds to access non-EU banking services: The EBA notes that Article 21c does not expressly address provisions in EU fund law (AIFMD and UCITS) which envisage and permit EU funds to receive banking services from third-country banks. The EBA suggests that clarification using Q&A may be adequate (rather than expanding the scope of the Interbank Exemption).

Practical issues for firms to consider

Key practical issues relating to the Interbank Exemption:

• Determine whether the EBA Report changes any aspect of CRD VI impact assessments, including programme assumptions.
• We do not expect the European Commission to propose any changes to the text based on the EBA’s findings. However it is possible that further information will be provided via EBA Q&A.
• Consider whether changes are required to existing cross-border manuals, tools and risk acceptances.

With less than a year until the CRD VI grandfathering period ends, other CRD VI actions to consider:

• Finessing programme implementation planning including resourcing, budget, systems/IT build, client communications, regulatory engagement etc.
• Timelines for national transposition, including reviewing and responding to any draft laws or consultations.
• As well as the Interbank Exemption, firms should consider the EBA consultations on third-country branch capital endowment requirements and booking arrangements.
• Review and enhance corporate banking booking model documentation. For UK firms, this review should consider the Prudential Regulation Authority’s expectations in Policy Statement PS6/25 – some of these are considered by Deloitte in a separate article.
• For areas of continued uncertainty, determine the nature and extent of industry engagement and/or external support required.