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Our policy on access to Exchange Settlement accounts

This page provides information about our policy for access to Exchange Settlement Accounts and what we consider when assessing applications for an account.

Important Notice: Hold on processing new ESAS account applications

The new Reserve Bank of New Zealand Act 2021 lists the central bank functions of the Reserve Bank of New Zealand (RBNZ), including providing settlement accounts to persons approved by the RBNZ (section 116(e)). In line with this new function, the Bank has initiated a review of its access policy and criteria for deciding applications to open ESAS (settlement) accounts. The review is designed to ensure that the access policy and criteria are appropriate for promoting the development of a payments system which:

  • Is efficient, open and flexible;
  • Has a high level of integrity;
  • Is robust in the face of financial crises.

The review could lead to revisions to the access policy and criteria and make ESAS accounts more readily available to a broader range of institutions, such as non-bank payment services providers (subject to maintaining the integrity and robustness of the ESAS system). There will be an opportunity for industry consultation on the review, which is expected to be completed during Q1, 2023. Financial institutions interested in participating in the ESAS access review consultation will be able to email their interest to [email protected]

While new applications for ESAS accounts may be submitted, the Bank will not be processing new applications received after 17 May 2022 until the ESAS access review is completed and the new access policy and criteria are in place. Prospective applicants may therefore consider holding off on making new applications until after the review. Registered banks are exempt from this hold on processing new ESAS account applications.

How ESAS accounts work

Section 32 of the Reserve Bank Act 1989 allows the Reserve Bank of New Zealand to provide settlement account services for financial institutions.

Exchange Settlement (ESAS) accounts are basic current accounts only. An ESAS account holder can conduct settlements with other account holders in central bank funds, which lets the receiver of those funds have absolute faith in the quality of the funds received. However,

  • no credit is provided; the account must be in funds at all times
  • we calculate interest for each account holder on a daily basis. Account holders receive the official cash rate (OCR) on balances up to a maximum balance that we determine.  Balances in excess of this amount are remunerated at the OCR less zero basis points. We may from time to time vary these arrangements
  • there is no right of access to: 
    • lender of last resort (LLR) facilities
    • intra-day or inter-day liquidity. Access to intra and inter-day liquidity is a separate decision based on the creditworthiness criteria used to determine acceptable domestic counterparties
  • no other rights or status are conferred.

Access to an ESAS account is a completely separate issue to access to any payments switch. The proprietors of each switch decide who has access. We expect all ESAS account holders to join the payment switches governed by Payments New Zealand.

See more information on Payments New Zealand website

The Commerce Commission is mainly responsible for competition policy.

Why we provide ESAS accounts

The goal of our settlement account policies is to promote the development of a payments system which:

  • is efficient, open and flexible
  • has a high level of integrity
  • is robust in the face of financial crises.

We also see our role in providing ES accounts as similar to a 'wholesale' activity as distinct from a 'retail' activity. We don't anticipate many applications for an ESAS account, given its very limited features.

What we consider for new applicants

When deciding on an application for an ESAS account, we consider whether:

  • the applicant fits the definition of financial institution in the Reserve Bank Act 1989
  • providing an ESAS account to the applicant might detract from the soundness or efficiency of the financial system
  • a legitimate business interest can be served by access to an ESAS account
  • providing an ESAS account would adversely affect our reputation

and any other matters we consider relevant to the application. Applicants will be expected to address each of these criteria in their application.

Account terms and conditions

Any new ESAS account holders would be subject to the same contractual terms and conditions as existing account holders. This is as agreed and provided for in the existing terms and conditions. In particular, applicants should note the provisions of clause 2.7 of the account terms and conditions.

For more information contact [email protected]