RBNZ completes licensing of non-bank deposit takers
(5 May 2015 – New Zealand) The Reserve Bank of New Zealand (RBNZ) completed its licensing of non-bank deposit takers (NBDTs), with licences issued to 31 entities on 1 May.
The licences give the RBNZ the power to monitor NBDTs and intervene should an NBDT become distressed or fail.
Toby Fiennes, RBNZ head of Prudential Supervision, said: “Completion of licensing puts in place another measure to help maintain the stability of New Zealand’s financial system.”
“Licensing can’t prevent an NBDT from failing but it reduces the risk and aims to maintain minimum entry standards,” Fiennes said.
“Licensed NBDTs are required to meet prudential requirements that cover credit ratings, governance, risk management, capital, related party exposures, liquidity, and suitable directors and senior officers,” Fiennes said.
As part of the licensing process, the Reserve Bank assessed each applicant’s ability to comply with the requirements of the Non-Bank Deposit Takers Act, and the suitability of each applicant’s directors and senior officers.
Finance companies that raise funds from the public, and most building societies and credit unions, were required to get a licence from the Reserve Bank no later than 1 May 2015.
The legal definition of an NDBT excludes most kinds of managed investment schemes and entities that fund themselves solely through non-public sources, for example those raising funds solely from related parties, or from corporate or wholesale sources.
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