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Helping you identify a non-bank deposit taker

This page aims to help trustees, potential non-bank deposit takers (NBDTs) and other stakeholders identify whether an entity is a non-bank deposit taker under the Non-bank Deposit Takers Act 2013 (the NBDT Act).

'Deposit taker' defined 

The NBDT Act defines an NBDT as any of the following person, other than a registered bank, that:

  1. makes an NBDT-regulated offer of debt securities, and carries on the business of borrowing and lending money or providing financial services (or both);
  2. is declared to be an NBDT for the purposes of the NBDT Act;
  3. is or has been an NBDT since section 5 of the NBDT Act came into force and has debt securities that remain unpaid and that were offered under an NBDT regulated offer; or
  4. was a deposit taker (as defined in section 157C of the Reserve Bank of New Zealand Act 1989) on or after 3 August 2011 but before section 5 of the NBDT Act came into force and has debt securities that were issued to the public before section 5 came into force and that remain unpaid.

NBDTs include finance companies that raise funds from the public, as well as most building societies and credit unions.

Managed investment schemes are not included. Nor are finance companies and other entities that fund solely from related parties, or from corporate or wholesale sources.

  • a bank that is a registered bank under the Reserve Bank of New Zealand Act 1989
  • a local authority
  • the Crown (as defined in the Public Finance Act 1989)

  • an entity in receivership (provided that no debt securities are being offered to the public in New Zealand by or on behalf of the entity) 
  • an entity that is in liquidation (whether under Part 16 of the Companies Act 1993 or under any other enactment) 
  • a person, or a member of a class of persons, declared by regulations made under Section 73(1)(d) not to be an NBDT for the purposes of this Act.

Read Section 5 of the NBDT Act

Identifying who is issuing debt securities

When identifying an NBDT, you need to clearly identify the person who is issuing debt securities and carrying on the business of borrowing and lending or providing financial services.


A manufacturing business wishes to raise debt to fund its operations and potentially the operations of other members of its corporate group. The manufacturer could:

  • issue the debt itself (that is a 'corporate issuer’); or
  • establish a subsidiary to issue the debt and lend funds to the manufacturer and members of its corporate group (that is a 'funding conduit').

Corporate issuer

The corporate issuer is not covered by the definition in Section 5(1)(a) of the NBDT Act. While it issues debt securities, the amounts raised are used to fund its manufacturing business (rather than to fund lending to other persons). Therefore, the corporate issuer does not carry on the business of borrowing and lending money or providing financial services.

Funding conduit

The funding conduit would meet the NBDT definition. It issues debt securities and on-lends to another person, such as its parent and/or members of the group. The funding conduit is therefore considered to be in 'the business of borrowing and lending money'. In addition, in some circumstances, a funding conduit may also provide financial services to members of the group.

However, as the economic substance of the two models is the same, funding conduits have been declared out of the definition of NBDT by the Non-bank Deposit Takers (Declared-out Entities) Regulations 2015.

Identifying who is carrying on business

As well as issuing debt securities to the public, to be an NBDT a person must 'carry on the business' of borrowing and lending money, or providing financial services, or both.

Whether an entity meets the 'carries on the business' test will depend upon the specific context. The test may be met if:

  • there is more than an isolated or one-off transaction; and
  • the activities are carried on with a view to earning a return in respect of those activities.

It is important to note that the business need not be the only or the primary activity carried on by the entity, but it should be a distinct and identifiable business that is more than an occasional or incidental activity.

Incidental activities are unlikely to meet the 'carrying on the business’ test. For example, isolated and incidental extensions of credit to purchasers of goods sold by a person do not normally mean that person carries on the business of lending money or providing financial services.

Overseas issuers

Overseas NBDTs operating in New Zealand are subject to New Zealand law and are required to comply with the prudential requirements established by or under the NBDT Act.


The above information is intended as guidance only. It is not a substitute for legal advice for the benefit of a deposit taker, a trustee or any other person. It does not claim to be definitive as the issues have not been considered by a court of law. We may revise our approach in light of new information, although we do not expect to have to do so in the absence of a judicial ruling.

Determining whether a given person is a deposit taker must be assessed on a case-by-case basis.