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APRA invites submissions to its review of use of the term 'bank'

Wednesday 22 December 2010

 

In the context of the Government's Competitive and Sustainable Banking System reforms, the Australian Prudential Regulation Authority (APRA) is conducting a review of the current guidelines for approval to use the term 'bank'.

Under section 66 of the Banking Act 1959, APRA's consent is required for financial businesses to use the restricted terms 'bank', 'banker' and 'banking'. Under a class consent issued in 2000, APRA allows building societies and credit unions to use the adjective 'banking' as descriptors of their financial business. However, under APRA's guidelines, the noun 'bank' and 'banker' can only be used in the business names of authorised deposit-taking institutions that hold at least $50m in Tier 1 capital. This minimum requirement has been in place since 1992.

APRA's criteria for granting consent to use restricted words are set out in Guidelines: Implementation of Section 66 of the Banking Act 1959, January 2006 and ADI Authorisation Guidelines, April 2008. Both publications are available on APRA's website: ADI prudential and reporting standards and guidance

APRA is inviting submissions on this issue as part of its review. Written submissions should be forwarded by 31 January 2011 to:

Section 66 Review
Policy, Research and Statistics
Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001

or email section66review@apra.gov.au

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6 trillion in assets for Australian depositors, policyholders and superannuation fund members.