If banks hit by the financial crisis apply for support their executives may earn no more than €500,000 ($673,000), and each lender is restricted to receiving €10 billion ($13.46 billion) in capital, a Finance Ministry spokesman said.
Any dividend payments must go to the state's and the government can also
force banks to reduce or give up entirely particularly risky lending practices, as well as to continue making loans to small and medium sized firms.
The government can also buy up toxic assets from banks but this is limited to €5 billion worth per lender.
The programme passed by lawmakers on Friday includes €400 billion in loan guarantees in order to get banks lending to each other and up to €80 billion to shore up banks' balance sheets battered by the financial crisis.
So far, no bank has signalled its intention to apply for aid under the rescue package but press reports said that the regional Bayerische Landesbank (BayernLB), the Bavarian state-owned lender, could be among the first.
The regional bank could require "billions of euros" in liquidity, state guarantees, and state purchases of high-risk instruments, the daily Bild cited Bavaria's finance minister Erwin Huber as saying on Monday.
The rescue package, the biggest in postwar Germany, was similar to other measures announced by Germany's partners in the 15-country eurozone along the lines of a British programme after crisis talks in Paris on October 12.
But Deutsche Bank chief Josef Ackermann, no stranger to controversy, raised hackles in the German cabinet on Monday for comments allegedly denigrating banks that turn the state for help.
Ackermann told the weekly newsmagazine Der Spiegel in its latest edition: "I would be ashamed if we were to take state money during this crisis."
Such comments sparked anger and indignation at a meeting of the German cabinet on Monday, government spokesman Thomas Steg told a news conference in Berlin. Steg described the remarks as "totally incomprehensible" and "objectionable", particularly since Ackermann had been one of the bank heads to call for state aid for the crisis-ridden financial sector in the first place.
Furthermore, banks had been fully and continously consulted when drawing up the rescue package rushed through parliament last week in an attempt to restore calm to the financial markets, the spokesman noted.
Steg said that, far from deserving shame, a bank that turned the state for aid should be seen as being "courageous" and "responsible."