The Reserve Bank has ordered a Tauranga-based organisation to stop using the word ‘bank’ in its name.
Banking System Department Chief Manager Peter Ledingham said: “A Tauranga-based organisation offering financial services has been using the word “bank” in its title. This is illegal under section 64 of the Reserve Bank of New Zealand Act 1989, given that the organisation referred to is not registered as a bank.
“Titles being used are “Sovereign Merchant Bank”, “Sovereign Bank” and “Bank of Tauranga”.
“There is no registered bank in New Zealand with any of these names and nor, as far as we can tell, is any such organisation registered as a bank in any other country.
“Under the Reserve Bank Act, any organisation calling itself a bank must be registered as a bank. Financial institutions that are not registered as banks are not permitted to use names that include the words "bank", "banker" or "banking". This is so the public can distinguish registered banks, which must meet minimum prudential and disclosure requirements mandated by the Reserve Bank, from other financial institutions which may not meet those standards. The Reserve Bank is responsible for registering banks and monitoring registered banks' compliance with regulatory requirements.
“Under the Reserve Bank Act section 64 (2) (a) and (b), an individual who breaks the law in this regard can be fined $100,000 and a body corporate can be fined $300,000,” Mr Ledingham noted.
For further information contact
Corporate Affairs Manager
Ph 04 471 3671, 021 497 418, home 04 938 8177, Jackmanp@rbnz.govt.nz
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