The Government announced in the 2017-18 Budget that it will act to reduce regulatory barriers to entry for new and innovative entrants to the banking system, by lifting the prohibition on the use of the word 'bank' by authorised deposit-taking institutions (ADIs) with less than $50 million in capital.
This consultation seeks stakeholder views on the draft Treasury Laws Amendment (2017 Measures No. 8) Bill 2017: amendment to section 66 of Banking Act (the draft Bill), which implements this measure. A draft explanatory memorandum is attached to assist readers in understanding the draft Bill.
Consistent with the Budget announcement, the draft Bill would amend the Banking Act 1959 to:
- allow any ADI to use the word ‘bank’ in relation to the ADI’s financial business (except in exceptional circumstances), replacing the $50 million threshold that APRA currently applies; and
- remove review by the Administrative Appeals Tribunal of APRA decisions regarding the use of ‘bank’ and other restricted terms in section 66.
The consultation on the draft Bill will close on Monday 14 August 2017.