RBNZ reviews Non-Bank Deposit Takers regime

Release date
04 April 2013

The Reserve Bank today released a consultation paper (384KB) on its review of the prudential regime for Non-Bank Deposit Takers (NBDTs).

NBDTs are entities that offer debt securities to the public, and borrow and lend money, or provide financial services, or both, but which are not banks. In New Zealand, they are commonly finance companies, building societies and credit unions.

Reserve Bank Deputy Governor Grant Spencer said: "NBDTs play a valuable role in the financial system by providing alternative deposit products to customers and investors, and alternative sources of funding for individuals and businesses.

"With the core parts of the prudential regime for this sector having been in place since late 2010, it is timely to now step back and assess the framework's overall operation and efficiency and to ensure it is appropriately tailored for the current NBDT environment."

Key parts of the consultation document include fine-tuning the definition of what constitutes an NBDT and ensuring the appropriate supervisory arrangements are in place for the sector.

The paper also looks at the underlying objectives of the regime, as well as considering the prudential and disclosure requirements, the offences and penalties in place for non-compliance, and crisis management powers.

"In looking at these matters, the Bank is conscious of the licensing regime for NBDTs that is currently before Parliament, and how this will affect the regulation of NBDTs in future," Mr Spencer said.

The Bank will prepare a report for the Minister of Finance on the outcomes of the review, which will then be tabled in Parliament. More information on the Reserve Bank's prudential supervision of NBDTs is available on the Bank's website.

Submissions on the consultation are sought by 17 May 2013.

Media Contact
Sonia Speedy
External Communications Adviser
Ph 04 471 3846, 021 663 082, sonia.speedy@rbnz.govt.nz