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Deposit taker regulations gazetted

The Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010 were gazetted yesterday and will come into force on 1 December 2010.

Reserve Bank Deputy Governor Grant Spencer said that under the regulations deposit taking finance companies, building societies and credit unions will be required to maintain a minimum capital ratio, and to limit the amount of credit they can provide to related parties.

"In particular, deposit takers' minimum capital ratios must not be less than 8 percent if the deposit taker has a credit rating and not less than 10 percent if the deposit taker does not have a credit rating.  Deposit takers' limits on aggregate exposures to related parties must be not more than 15 percent of their capital," said Mr Spencer.

The new regulations also reiterate the type of credit rating deposit takers with liabilities of more than $20 million must have. This requirement has been in force since 1 March 2010.

"The governance requirements for deposit takers in the Reserve Bank Act will also come into force on 1 December 2010. From that date most deposit takers will need to have two independent directors and a non-executive chairperson. 

"Overall the regulations will serve to improve investor confidence, as well as promote improved risk management by deposit takers," Mr Spencer concluded.

Extensive public consultation was undertaken throughout 2009 on the policy behind the regulations and a further round of consultation was undertaken earlier this year on the draft regulations.

Questions and Answers and information on the new regulations can be accessed on the Bank's website.

Overview of non-bank deposit takers regime

Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010

Media contact

Anthea Black
External Communications Adviser
04 4713767, 021 2225225