The KNF is also known to be slow in processing licenses (some say up to 30 months), which adds to the risk.
I would have been in favour if it doesn't take this long to process a licence. I'm not sure if it's actually true, but if it is, then it's not good. Why exactly does it take that long? That's over two years of waiting for a license to do business in the country. I understand that these things take time, but a maximum of one year should e enough for every check and processing.
1) Are these penalties (10M PLN fine, 2 years prison) too harsh for the industry?
No, they're not too much. The penalty for defaulting should be huge so people won't default. If it was a little something they can pay easily, they will break the law and simply pay the fines.
2) Will this protect users, or just kill off competition and leave the market to a few big players?[/glow]
Aside from the fact that the processing period for the licences is too long, I don't think it will affect competition in the market. Or there may be other factors we are unaware of, such as licenses being too expensive for smaller firms or big firms being prioritised over small firms in the country.