The consultation paper proposes expanding the use of the word 'bank' to all deposit takers that become licensed under the DTA. This could include entities that are currently licensed as non-bank deposit takers (NBDTs), explains Acting Assistant Governor Financial Stability, Angus McGregor.
"Reviewing this policy creates an opportunity to support improvements in the competitive landscape," Mr McGregor says.
Restrictions on the use of the words 'bank', 'banker' and 'banking' help the public to identify which entities are subject to prudential regulation. The consultation paper seeks feedback on the use of restricted words in entities' name or title once the DTA is fully in force.
"We have carefully considered the merits of expanding the use of the word 'bank', consistent with our financial stability objective," Mr McGregor says.
Any changes will take effect when the DTA fully commences, expected on 1 December 2028. The DTA will replace existing prudential legislation with a single regulatory regime for all deposit takers.
Use of the word 'bank' under the DTA
Consultation also opens on regulatory perimeter
A companion paper has also been published seeking feedback on proposed regulations relating to the regulatory perimeter, and other matters important for the smooth implementation of the DTA.
This consultation aims to further clarify and set the boundary of the regulatory perimeter before licensing of deposit takers commences under the DTA. The prudential regulatory perimeter defines the types of entities that are subject to the licensing process and ongoing prudential supervision under the DTA. The paper considers whether certain types of fintechs should be within the prudential perimeter.
The DTA licensing process is currently expected to begin on 1 June 2027.
"We encourage submitters to read and consider both consultation papers side by side, and we welcome submitters to provide feedback on one or both documents," Mr McGregor says.
Second tranche of Deposit Takers Regulations under the DTA
Deposit Takers Act 2023
The DTA modernises New Zealand's regulatory framework for deposit takers. It aims to help ensure the safety and soundness of deposit takers and support a stable financial system that New Zealanders can trust.
