The Reserve Bank of New Zealand (RBNZ) - Te Pūtea Matua has announced that all deposit takers will be able to call themselves banks if they become licensed under the Deposit Takers Act 2023 (DTA). The decision follows RBNZ's 2025 public consultation on use of the word 'bank' under the DTA.
Use of the words 'bank', 'banker' and 'banking' is restricted under the Banking (Prudential Supervision) Act 1989 (BPSA), to help the public identify which entities are subject to prudential regulation. When the DTA comes into full effect on 1 December 2028, all licensed deposit takers, including entities currently licensed as non-bank deposit takers (NBDTs), will be able to use these restricted words. Overseas banks that do not have a physical presence in New Zealand can continue to use restricted words, as is authorised under the DTA.
"We are satisfied that the DTA provides the necessary safeguards to extend the use of restricted words to all licensed deposit takers. This change supports improvements in the competitive landscape and a consistent approach across deposit takers, which was largely supported in consultation feedback," says Acting Assistant Governor Financial Stability, Angus McGregor.
As well as introducing the Depositor Compensation Scheme, the DTA provides for new supervision powers and a framework for managing and resolving a deposit taker in financial distress. The DTA also gives RBNZ greater power to monitor deposit taker stability and step in if a deposit taker's financial situation or business practices are putting depositors' money, and New Zealand's financial system, at risk.
"The DTA provides for closer regulation of all deposit takers and gives us new powers to make sure entities able to call themselves banks are doing the right things to keep depositors' money safe," Mr McGregor says.
Changes in the use of restricted words under the DTA
- Currently registered banks (including registered branches of overseas banks) are permitted to use restricted words but licensed NBDTs cannot. Under the DTA, licensed deposit takers that were formerly licensed as NBDTs would have the option to rebrand as banks.
- Currently overseas banks that do not have a place of business in New Zealand can use restricted words for certain wholesale activities. This will continue under the DTA, provided the overseas bank does not have a physical presence in New Zealand, only undertakes limited wholesale activities, and meets all other authorisation conditions.
- Currently financial service providers that fall outside of RBNZ's prudential regulatory perimeter cannot use restricted words. This will continue under the DTA.
More information
Deposit Takers Act information on the RBNZ website
2025 consultation materials and submissions on the Citizen Space website
