The European Central Bank would have the sole power to grant banking licenses under proposals to give it supervisory powers and build a euro-area banking union, a European Union official said.

The ECB would have a monopoly on granting all bank licenses within the 17-nation euro area under the plan, due to be unveiled on Sept. 12, the official said, speaking on condition of anonymity because the plan isn't final. Under the proposals, which are being drafted by the European Commission, the ECB would also gain discretion over which banks to supervise directly and when it will delegate day-to-day oversight responsibilities, the official said.

National regulators will retain control over when and how to close a bank under the proposals. At the same time, the central bank would be able to make recommendations and have a voice in the process.