Bank Spółdzielczy [Cooperative Bank]. BGŻ Management Board Members were often appointed to sit on the academic and program boards of periodicals, for example Bank i Kredyt or Spółdzielczy Kwartalnik Naukowy . BGŻ employees were also often elected to academic councils of institutes, e.g. the Cooperative Institute of Rural and Agricultural Development.

Changes in the activities of cooperative banking

Enactment of the Banking Law Act of 31 January 1989 was a very important moment for the activities of the cooperative banking and for the whole banking system in Poland. The act introduced solutions bringing the Polish banking system to the requirements of the European Economic Community (EEC). It increased the autonomy of individual banks and expanded the economic instruments for control of their activity by NBP.

The act maintained the existence of cooperative-and-state banks. This possibility was repealed in 1992.Also the provisions of the act of 28 December 1989 on regulation of credit relations had significant influence on the functioning of BGŻ and cooperative banks in the early 90s. In accordance with the act, the following elements were repealed: the obligations imposed on banks as regards preferential treatment in access to loans; loan interest according to fixed and preferential rates; loan agreement provisions with fixed and preferential rate interest. In addition, a principle was introduced according to which liabilities to banks on account of the changed interest on loans for 1990 were subject to repayment in 40% of the interest amount, and the remaining amount was added to the loan debt. The new regulations contributed to increase of debt and difficulties in its repayment. This was particularly visible in the agriculture and agricultural and food industry, which had negative impact on BGŻ s future financing standing87.

Also the provisions of the act of 1990 on changes to organization and activity of the coop- erative sector had negative consequences for the cooperative banking. Pursuant to the act, cooperative associations were liquidated and the organizations discharging the duties of cooperative associations, including BGŻ, were obligated to discontinue their activities in this respect. As a consequence of the act, BGŻ was deprived of the right to audit coopera- tive banks. Mutual relations between BGŻ and cooperative banks were based on volun- tary agreements on mutual economic, financial, settlement, credit, training and technical cooperation. Agreements on affiliation with these banks were civil-law contracts, i.e. they could be terminated by both parties, which meant that banks could change their mem- bership in the affiliating structures88.

87. Calendar of events., op. cit., p. 37.

88. ABGŻ, file no. 1392, Historical background.

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