Consultation on Banking Act 1959 Section 66 Instruments
APRA is releasing for consultation a set of minor proposals on instruments relating to section 66 of the Banking Act 1959 (the Act).
Background
Under section 66 of the Act, certain words and expressions are restricted in use within the context of a financial business, such as the use of the word ‘bank’, and words of like import, unless APRA has provided written consent for a person or class of persons to use those words and expressions.
APRA’s guidelines on section 66 of the Act are available here: Guidelines: Restricted Words under the Banking Act 1959.
Proposals
Several exemption and determination instruments have been made by APRA in relation to section 66 of the Act. These instruments allow persons or classes of persons to use restricted words or expressions in certain circumstances.
The table below sets out APRA’s proposals pertaining to exemption and determination instruments that are due to sunset later this year, in accordance with the Legislation Act 2003, or that require updating to reflect current practice. A full overview of the proposals is provided in Appendix A.
| Banking Act Section 66 Instrument | Purpose | Proposal |
|---|---|---|
| Banking exemption No. 1 of 2018 | Exemption for foreign banks issuing wholesale securities. | Remake the instrument to expand the exempt classes to include foreign bank holding companies and multilateral development banks. |
| Banking (restricted word or expression) determination No. 1 of 2015 | Determines ‘credit co-operative’ is a restricted expression (sunsets 1 October 2025). | Remake the instrument, without change, prior to the sunsetting date. |
| Banking (restricted word or expression) No. 2 of 2015 - Consent regarding “Offshore Banking Unit” | Conditional consent for offshore banking units (sunsets 1 October 2025). | Allow the instrument to sunset. |
Consultation
The draft instruments are available on APRA’s website at: Banking Act exemptions and section 66 guidelines.
APRA welcomes feedback on the draft instruments and the proposal to allow the Offshore Banking Unit instrument to sunset. Written submissions should be sent to licensing@apra.gov.au by 15 August 2025 and addressed to: Senior Manager, Licensing, APRA.
Yours sincerely
Sean Carmody
Executive Director
Policy and Advice Division
Appendix A – Overview of the proposals
Banking exemption No. 1 of 2018 (BOE2018)
Under BOE2018, APRA provides consent for any foreign corporation (authorised as a bank in its home country) to use the word ‘bank’, and words of like import, when raising funds in the Australian wholesale capital market, subject to conditions.
The purpose of the new exemption instrument is to broaden the class of foreign corporations that are eligible to use the restricted word ‘bank’, and words of like import, when raising funds in the Australian wholesale capital markets, to include foreign bank holding and multilateral development banks.
The draft instrument better reflects the types of entities that commonly seek APRA’s consent to use restricted words when issuing securities in the Australian wholesale capital markets. The proposed exemption instrument will save foreign bank holding companies and multilateral development banks from the administrative burden incurred when applying to APRA for a bespoke section 66 consent under the Act.
Banking (restricted word or expression) determination No. 1 of 2015 (BOD2015)
BOD2015 determines that the expression ‘credit co-operative’ is a restricted expression under section 66 of the Act. The determination instrument is due to sunset on 1 October 2025. APRA proposes to remake the instrument, without change, as APRA’s view is that a non-APRA regulated financial business using the expression ‘credit co-operative’ is likely to mislead the general public into believing that the business is an authorised deposit-taking institution (ADI).
The draft determination instrument would ensure the expression ‘credit co-operative’ continues to be a restricted expression for the purposes of section 66 of the Act.
Banking (restricted word or expression) No. 2 of 2015 (BOE2015)
BOE2015 grants conditional consent for an offshore banking unit (OBU) to use the word ‘banking’ as part of the expression ‘offshore banking unit’, in relation to its offshore banking business.
Australia’s OBU regime has been abolished.1 The concessional tax treatment for OBUs in respect of offshore banking activities has been removed, effective from the commencement of the OBU’s 2023-24 income year. Due to the removal of the concessional tax treatment, APRA believes that the existing instrument has become obsolete and is likely no longer being relied upon. Hence, APRA is proposing to not remake the existing instrument before it sunsets on 1 October 2025.
APRA welcomes feedback on whether BOE2015 is still being relied upon by legacy participants of the OBU regime.
Footnote
1 Changes to Australia's Offshore Banking Unit Regime | Australian Taxation Office.