Deposit Takers legislation passes third reading – strengthening NZ’s financial stability framework

3 July 2023

The Deposit Takers Bill (the DT Bill) has passed its final reading on 29 June 2023. 

The Act, once in force, will reform the prudential regulatory regime applying to banks and non-bank deposit takers in New Zealand, and will introduce a ‘depositor compensation scheme’ that will provide for compensation of up to $100,000 per depositor in the event of a deposit taker failure.  It will come into force in stages, with the depositor compensation scheme being prioritised and expected to be operational by late 2024. The Reserve Bank of New Zealand – Te Pūtea Matua expects the balance of the Act to be in force by 2028.

This represents a fundamental rewrite of New Zealand’s banking supervision laws. It establishes as single set of rules for all “deposit takers” and establishes a depositor compensation scheme, which will be funded by levies from the industry. It also strengthens the supervision and enforcement powers of the Reserve Bank Te Pūtea Matua. For further details of our analysis please refer to our previous publication here.

If you would like advice on how the DT Bill is likely to affect your organisation, including on the scope of the regulatory perimeter of the DT Bill, please get in touch with the contacts listed, or your usual Bell Gully adviser.

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.