Banking (Prudential Supervision) Act 1989

If you need more information about this Act, please contact the administering agency: Reserve Bank of New Zealand

Warning: Some amendments have not yet been incorporated
Previous title has changed

Search within this Act

Version as at 1 July 2022

Banking (Prudential Supervision) Act 1989

Public Act		1989 No 157
Date of assent		20 December 1989
Commencement		see section 1(2)

Act name: amended, on 1 July 2022, by section 298(2) of the Reserve Bank of New Zealand Act 2021 (2021 No 31).

Note

The Parliamentary Counsel Office has made editorial and format changes to this version using the powers under subpart 2 of Part 3 of the Legislation Act 2019.

Note 4 at the end of this version provides a list of the amendments included in it.

This Act is administered by the Reserve Bank of New Zealand.

	Title [Repealed]
1	Title and commencement
1A	Purpose
1B	Overview
2	Interpretation
3	Interpretation of provisions relating to false or misleading information
3A	Transitional, savings, and related provisions
4	Act to bind the Crown
	Part 1 Constitution of Reserve Bank of New Zealand [Repealed]
5	Reserve Bank of New Zealand [Repealed]
6	Branches and agencies [Repealed]
	Part 2 Functions and powers of Reserve Bank [Repealed]
	Central bank [Repealed]
7	Bank to act as central bank [Repealed]
	Monetary policy [Repealed]
8	Function to formulate monetary policy through MPC [Repealed]
9	Function to implement monetary policy [Repealed]
10	Remit for MPC [Repealed]
11	Other matters relating to remit [Repealed]
12	Order providing for different economic objective or objectives [Repealed]
13	Order must include replacement remit [Repealed]
14	Effect of order on current remit [Repealed]
15	Period may be extended [Repealed]
15A	Revocation of order [Repealed]
15B	Functions under sections 8 and 9 not affected [Repealed]
15C	Regular reports on monetary policy [Repealed]
15D	Longer-term report on formulation and implementation of monetary policy [Repealed]
	Foreign exchange [Repealed]
16	Dealing in foreign exchange by Bank [Repealed]
17	Power of Minister to direct Bank to deal in foreign exchange within guidelines [Repealed]
18	Power of Minister to fix exchange rates for foreign exchange dealing by Bank [Repealed]
19	Effect of directions on operational objectives [Repealed]
20	Effect of directions on monetary policy [Repealed]
21	Foreign exchange gains and losses [Repealed]
22	Temporary suspension of foreign exchange business [Repealed]
23	Bank to advise Minister on foreign exchange matters [Repealed]
24	Foreign reserves [Repealed]
	Currency [Repealed]
25	Issue of currency by Bank [Repealed]
26	Power of Bank to call in currency [Repealed]
27	Legal tender [Repealed]
28	Defacing bank notes [Repealed]
29	Making or issuing of other bank notes or coins [Repealed]
30	Reproduction or imitation of currency [Repealed]
	Other functions and powers [Repealed]
31	Bank to act as lender of last resort [Repealed]
32	Bank may provide settlement account services [Repealed]
33	Policy advice [Repealed]
34	Government banking business [Repealed]
35	Financial products registry services [Repealed]
36	Bank may require financial institution to supply information [Repealed]
37	Failure to supply information [Repealed]
38	Requirement that information be audited [Repealed]
39	Powers [Repealed]
	Part 3 Management of Reserve Bank [Repealed]
	Governor and Deputy Governor [Repealed]
40	Governor [Repealed]
41	Duties of Governor [Repealed]
42	Conditions of appointment of Governor [Repealed]
43	Deputy Governor [Repealed]
44	Term of appointment and conditions of appointment of Deputy Governor [Repealed]
45	Extension of term of Governor or Deputy Governor [Repealed]
45A	Validity of appointments [Repealed]
46	Disqualification of Governor and Deputy Governor [Repealed]
47	Incapacity of Governor and Deputy Governor [Repealed]
48	Vacancy in office of Governor [Repealed]
48A	Deputy Governor may act pending appointment [Repealed]
48B	Vacancy in office of Deputy Governor [Repealed]
49	Removal of Governor from office [Repealed]
50	Removal of Deputy Governor from office by Order in Council [Repealed]
51	Delegation [Repealed]
	Board of directors [Repealed]
52	Board of directors [Repealed]
53	Duties of Board [Repealed]
53A	Board must prepare annual report [Repealed]
53B	Board must supply reports or other information to Minister [Repealed]
53C	Bank must supply reports or information to Board [Repealed]
54	Membership of Board [Repealed]
55	Term of office of non-executive directors [Repealed]
56	Considerations affecting appointment of non-executive directors [Repealed]
57	Extraordinary vacancies [Repealed]
58	Disqualification of non-executive directors [Repealed]
59	Removal from office of non-executive directors [Repealed]
59A	Chairperson and deputy chairperson of Board [Repealed]
60	Meetings of Board [Repealed]
60A	Teleconference meeting [Repealed]
60B	Directors to be notified of meetings [Repealed]
60C	Who presides at meetings of Board [Repealed]
61	Directors to disclose interests [Repealed]
62	Committees [Repealed]
63	Fees and expenses of non-executive directors [Repealed]
	Monetary policy committee [Repealed]
63A	Establishment of monetary policy committee [Repealed]
63B	Functions of MPC [Repealed]
63C	Membership of MPC [Repealed]
63D	Charter [Repealed]
63E	Content of charter [Repealed]
63F	Replacement charter [Repealed]
63G	Consultation about replacement charter [Repealed]
63H	Publication of charter [Repealed]
63I	Status of charter [Repealed]
63J	Code of conduct [Repealed]
63K	Content of code [Repealed]
63L	Publication and status of code [Repealed]
63M	Other matters [Repealed]
	Appointment procedure [Repealed]
63N	Appointment procedure [Repealed]
	Part 4 Use of words ‘bank’, ‘banker’, and ‘banking’
	Limit on use of restricted words in name or title
64	Limit on use of restricted words in name or title
65	Bank may authorise use of restricted words in name or title
66	Certain persons exempt from application of section 64
66A	Application of Companies Act 1993
	Limit on use of restricted words in advertisement
66B	Limit on use of restricted words in advertisement
	Powers of Bank in relation to use of restricted words
66C	Power to obtain information
66D	Power to require change of name, etc
66E	Power to appoint person to enter and search premises
66F	Requirements on entering and searching premises
66G	Confidentiality of information or documents
66H	Limits on further disclosure of information or documents published or disclosed under section 66G
66I	Procedure for obtaining warrants
66J	Effect of warrant [Repealed]
66K	Effect of proceedings
66L	Effect of final decision that exercise of powers under section 66E unlawful
	Penalty for offences against this Part
66M	Penalty for offences
	Part 5 Registration of banks and prudential supervision of registered banks
67A	Interpretation in this Part
67	Registration and prudential supervision
68	Exercise of powers under this Part
68A	Trans-Tasman co-operation
68B	Bank to have regard to directions about government policy objectives [Repealed]
	Registration of banks
69	Register
70	Application for registration
71	Voluntary removal of name from register
72	Offence for person who is not registered bank to hold itself out to be registered bank
73	Determination of applications
73A	Further matters to which Bank must have regard if applicant is overseas person
73B	Further matters to which Bank must have regard if applicant is subsidiary of overseas person
74	Conditions of registration
75	Publication of principles [Repealed]
76	Registration of certain persons
77	Cancellation of registration
77A	Changes of ownership
77B	Effect of section 77A on contracts, etc
78	Carrying on business in prudent manner
79	Annual fee [Repealed]
80	Credit rating of registered banks
	Financial disclosure by registered banks
81	Public disclosure of information or data by registered banks
81AA	Further matters that may be prescribed
81AB	Disclosure statement not required to include information or data about customers or clients of registered banks
81AC	Duty to supply information or data to registered bank
81A	Bank to consult
82	Disclosure statements must be signed
83	Bank may require disclosure statement to be corrected
	Advertising by registered banks [Repealed]
84	Interpretation [Repealed]
85	Content of advertisements by registered banks [Repealed]
86	Regulations [Repealed]
87	Offence to advertise in contravention of regulations [Repealed]
88	Bank may prohibit advertisements by registered banks [Repealed]
	Provisions applying to disclosure statements
89	Offence to fail to publish required information in disclosure statement
89A	Offence to publish false or misleading disclosure statements
89B	Offence to fail to make most recent disclosure statement publicly available
89C	Other offences in relation to disclosure statements
90	Civil liability
91	Defences
92	Fair Trading Act 1986 not affected
	Supply of information
93	Supply of information by registered banks for purposes of prudential supervision
93A	Scope of notice under section 93
93B	Certain persons may be required to supply information to registered banks
93C	Supply of information by other persons for purposes of prudential supervision
94	Requirement that information, data, or forecasts be audited
95	Bank may require report relating to registered banks, etc
95A	Bank may require report under section 95 to be published
96	Disclosure of information to Bank by auditors
97	Auditor to inform of intention to disclose
98	Protection of auditors
	Access to information by home country supervisor
98A	Access to information by home country supervisor
98B	Duties of person on receipt of notice under section 98A
	Powers to obtain information and documents
99	Powers to obtain information and documents
100	Requirements on entering and searching premises
	Investigations
101	Investigation of affairs of registered bank
102	Powers of person appointed to carry out investigation
103	Offences in relation to investigations
104	Requirements to be complied with by person carrying out investigation
	Miscellaneous provisions
105	Confidentiality of information
106	Procedure for obtaining warrants
107	Effect of warrant
108	Effect of proceedings
109	Effect of final decision that exercise of powers under section 99 unlawful
110	Effect of final decision that exercise of powers under section 101 or section 102 unlawful
	Reserve Bank may give directions
111	Bank may require registered bank to consult [Repealed]
112	Bank may give advice and assistance [Repealed]
113	Bank may give directions
113A	Scope of directions
113B	Power to remove, replace, or appoint directors
114	Offence to contravene directions
115	Offence to disclose giving of direction
116	Miscellaneous provisions with respect to directions and dispositions
	Statutory management of registered banks
117	Statutory management of registered banks and associated persons
118	Grounds on which registered bank may be declared to be subject to statutory management
119	Advisory committee
120	Statutory manager to comply with directions of Bank
121	Considerations affecting exercise of powers by statutory manager
121A	Statutory manager to avoid actions likely to have detrimental effect
122	Moratorium
122A	Definitions of terms relating to qualifying derivatives
122B	Matters relating to possession or control of collateral
122C	Bank may reduce or extend stay on exercise of rights to enforce security interest over collateral
122D	Matters Bank must be satisfied of under section 122C(3)(b)
122E	Publication and status of notice under section 122C
123	Statutory manager may incorporate company under Companies Act 1993 to acquire business of branch of foreign institution
124	Vesting of property subject to security
125	Proof of vesting
126	Prohibition against removal of assets
127	Statutory manager may suspend payment of money owing
128	Management of registered bank to vest in statutory manager
129	Powers of statutory manager
130	Statutory manager empowered to carry on business of registered bank
131	Statutory manager may pay creditors and compromise claims
132	Sale of registered bank
133	Consents not required under other Acts
134	Sale of property or assets subject to a security
135	Proof of transactions
136	Liquidation of registered banks
137	Provisions applying where liabilities included in sale
138	Power to trace property improperly disposed of
139	Application of certain provisions of Companies Act 1993
	Interpretation relating to covered bonds
139A	Interpretation
139B	Meaning of covered bond SPV
139C	Meaning of issuer
	Registration of covered bond programmes
139D	Register of registered covered bond programmes
139E	Requirement, and application, for registration of covered bond programme
139F	Determination of application for registration of covered bond programme
139G	Bank must approve or decline application
139H	Requirements relating to registered covered bond programmes
	Cover pool monitor
139I	Cover pool monitor
	Statutory management, etc, of issuer
139J	Limitation on application of statutory management, etc, provisions to covered bond SPV
	Miscellaneous provisions
140	Application of this Part to joint statutory managers, associated persons, and subsidiaries
141	Termination of appointment of statutory manager
142	Statutory manager may apply to High Court for directions
143	Prior winding up, liquidation, or receivership to cease
143A	Continuation of statutory management
144	Termination of statutory management
145	Obligations incurred by statutory manager
146	Indemnity [Repealed]
147	Registered bank not entitled to be informed about exercise of powers
148	Expenses of statutory management
149	Advances to statutory manager and members of advisory committee
150	Duty to deliver books and property to statutory manager
151	Offence to destroy, alter, or conceal records
152	Regulations relating to powers of Bank and statutory manager
152A	Regulations are confirmable instruments [Repealed]
153	Application of other Acts
154	Appointment of auditors
155	Annual accounts
156	Annual report by statutory manager
	Penalties for offences against this Part
156AA	Penalty for miscellaneous offences
156AB	Penalty for offences relating to supply of information, etc
156AC	Penalty for offences relating to registration of banks, disclosure statements, prudential supervision of registered banks, etc
	Part 5A Retention of documents by banks
156A	Retention of documents by banks
	Part 5B Oversight of payment systems
	General
156B	Exercise of powers under this Part
	Supply of information relating to payment systems
156C	Requirement to supply information relating to payment system
156D	Offence to fail to supply information
156E	Requirement that information be audited
156F	Offence not to comply with requirement for audit
	Disclosure of information relating to payment systems
156G	Disclosure of information
156H	Limits on further disclosure of information
156I	Application of other enactments to information published or disclosed under section 156G
	Penalties for offences against this Part
156J	Penalties for offences
	Part 5C Designated settlement systems
	General
156K	Exercise of powers under this Part
156L	Limit on FMA’s powers in relation to Bank
	Designation [Repealed]
156M	Definitions for this Part
	Designation
156N	Designation of settlement system
	Effect of designation [Repealed]
156O	Joint regulators’ recommendations subject to procedure in sections 156Y to 156ZA
	Effect of designation
156P	Application of this Part to pure payment systems
156Q	Rules of designated settlement system are valid and enforceable
156R	Settlements must not be reversed, etc
156S	Limits on application of section 156R(1)
156T	Netting is valid and enforceable
156U	Interrelationship between netting and Companies Act 1993 and Insolvency Act 2006
	Procedure for making designation [Repealed]
156V	Underlying transactions, settlements, and limits on effect of sections 156Q, 156R, and 156T
156W	Interrelationship with other enactments
156X	Transfer of property in accordance with rules is effective
	Procedure for making designation
156Y	Application for designation
156Z	Consideration of application
156ZA	Decision on application
	Amendments to rules
156ZB	Joint regulators must be notified of proposed amendments to rules
156ZC	Proposed amendments to rules may be disallowed
	Variation and revocation of designation
156ZD	Variation of designation
156ZE	Revocation of designation
156ZF	Settlement and netting not affected by variation or revocation of designation
156ZG	Application for variation or revocation of designation
156ZH	Either joint regulator may independently begin review of designation
156ZI	Matters joint regulators may have regard to in recommending variation or revocation of designation
156ZJ	Procedure for variation or revocation of designation
	Obligations to give notice and supply information
156ZK	Contact person must be notified of insolvency event
156ZL	Supply of information relating to designated settlement system
	Disclosure of information
156ZM	Disclosure of information between joint regulators
156ZN	Disclosure of information to third parties
156ZO	Limits on further disclosure of information
156ZP	Application of other enactments to information published or disclosed under section 156ZN
	Penalties for offences against this Part
156ZQ	Penalties for offences
	Part 5D Deposit takers [Repealed]
	Preliminary provisions [Repealed]
157A	Exercise of powers under this Part [Repealed]
157B	Interpretation [Repealed]
157C	Deposit taker defined [Repealed]
157D	Application of Part [Repealed]
157E	Bank to consult before recommending making of regulations under this Part [Repealed]
157F	Principles to be taken into account under this Part [Repealed]
157G	Exemptions from Part [Repealed]
157H	Effect of exemption [Repealed]
	Credit ratings [Repealed]
157I	Deposit taker must have current credit rating [Repealed]
157J	Bank may approve rating agencies [Repealed]
157K	Regulations relating to credit ratings [Repealed]
	Governance requirements [Repealed]
157L	Governance requirements [Repealed]
	Risk management [Repealed]
157M	Deposit taker must have and comply with risk management programme [Repealed]
157N	Risk management programme must be provided to trustee and must be amended if required by trustee [Repealed]
157O	Trustee may require deposit taker to have risk management programme audited [Repealed]
	Minimum capital requirement [Repealed]
157P	Regulations may impose requirement that trust deed sets out minimum capital that deposit taker is required to maintain [Repealed]
157Q	Deposit takers and trustees must ensure trust deed sets out minimum capital deposit taker is required to maintain [Repealed]
157R	Deposit taker must maintain not less than minimum capital prescribed [Repealed]
	Capital ratio requirement [Repealed]
157S	Regulations may impose requirement that trust deed includes capital ratio [Repealed]
157T	Deposit takers and trustees must ensure capital ratio included in trust deed [Repealed]
157U	Deposit taker must maintain capital ratio required to be included in trust deed [Repealed]
	Restrictions on related party exposures [Repealed]
157V	Regulations may impose requirement that trust deed includes maximum limit on exposures to related parties [Repealed]
157W	Regulations may incorporate by reference framework for calculation of maximum limit on exposures to related parties [Repealed]
157X	Deposit takers and trustees must ensure maximum limit on exposures to related parties is included in trust deed [Repealed]
157Y	Deposit taker must not exceed maximum limit on related party exposures [Repealed]
	Liquidity requirements [Repealed]
157Z	Regulations may impose requirement that liquidity requirements be included in trust deed [Repealed]
157ZA	Deposit takers and trustees must ensure liquidity requirements are included in trust deeds [Repealed]
157ZB	Deposit takers must comply with liquidity requirements in trust deeds [Repealed]
	Other matters relating to trust deeds [Repealed]
157ZC	Amendment to trust deed must be treated as if authorised to be made [Repealed]
157ZD	Trustee may execute amendment to trust deed [Repealed]
	Obligations of trustees to Bank [Repealed]
157ZE	Bank may require trustee to attest as to deposit taker’s compliance with requirements [Repealed]
157ZF	Trustee must report to Bank non-compliance or likely non-compliance by deposit taker [Repealed]
157ZG	Obligation on trustees to disclose information to Bank in certain circumstances [Repealed]
157ZH	Protection of trustees [Repealed]
	Investigation and enforcement powers of Bank [Repealed]
157ZI	Bank may require report relating to deposit taker [Repealed]
157ZJ	Power to obtain information and documents [Repealed]
157ZK	Limitation on information to be provided [Repealed]
157ZL	Limitations on entering and searching place [Repealed]
157ZM	Search warrant may be issued [Repealed]
157ZN	Privileges [Repealed]
	Confidentiality of information [Repealed]
157ZO	Confidentiality of information [Repealed]
157ZP	Person who does not comply with section 157ZO commits offence [Repealed]
157ZQ	Application of Official Information Act 1982, etc [Repealed]
	Offences and penalties [Repealed]
157ZR	Offences by deposit takers against this Part [Repealed]
157ZS	Other offences by deposit takers against this Part [Repealed]
157ZT	Defence for deposit takers charged with offences against this Part [Repealed]
157ZU	Power of court to discharge deposit taker [Repealed]
157ZV	Liability of directors [Repealed]
157ZW	Offences by trustees against this Part [Repealed]
157ZX	Penalties for offences [Repealed]
	Miscellaneous [Repealed]
157ZY	Matters relating to regulation-making powers under this Part [Repealed]
157ZZ	Bank must review and report on operation of this Part [Repealed]
	Part 6 Financial and accountability matters [Repealed]
157	Financial year [Repealed]
	Income and expenditure [Repealed]
158	Meaning of notional surplus income [Repealed]
159	Funding agreements [Repealed]
160	Contents of funding agreements [Repealed]
161	Funding agreements to be ratified by House of Representatives [Repealed]
162	Determination of annual dividend [Repealed]
	Accountability documents [Repealed]
162AA	Purpose of accountability documents [Repealed]
162AB	Assessment of regulatory impacts of policies [Repealed]
	Statement of intent [Repealed]
162A	Obligation to provide statement of intent [Repealed]
162B	Content of statement of intent [Repealed]
162C	Process for providing statement of intent to Minister [Repealed]
162D	Amendments by Bank to statement of intent [Repealed]
162E	Statement of intent stands referred to House of Representatives [Repealed]
	Annual reports [Repealed]
163	Annual reports and accounts [Repealed]
163A	Bank not Crown entity [Repealed]
164	Contents of financial statements [Repealed]
165	Management statements [Repealed]
	Financial stability reports [Repealed]
165A	Financial stability reports [Repealed]
	Audits [Repealed]
166	Auditor-General to be auditor of Bank [Repealed]
167	Performance audit [Repealed]
	Part 7 Miscellaneous provisions
168	Bank to be good employer [Repealed]
169	Bank to exhibit sense of social responsibility [Repealed]
170	Application of Banking Act 1982 to Bank [Repealed]
171	Conflict with other Acts [Repealed]
172	Obligations under this Act not limited
173	Regulations
174	Consents under regulations
175	Offences against regulations
175A	Privilege against self-incrimination no excuse [Repealed]
175B	Admissibility of self-incriminating statements [Repealed]
176	Penalties for offences
177	Time for filing charging document
178	Evidence [Repealed]
179	Protection from liability [Repealed]
179A	Indemnity [Repealed]
180	Amendment to Income Tax Act 1976 [Repealed]
181	Amendments to Securities Act 1978 [Repealed]
182	Amendments to Superannuation Schemes Act 1989 [Repealed]
183	Amendments to Trustee Banks Restructuring Act 1988 [Repealed]
184	Amendment to Securities Amendment Act 1988 [Repealed]
185	Consequential amendments [Repealed]
186	Repeals and savings [Repealed]
187	References to trading banks to be read as references to registered banks
188	Savings [Repealed]
189	Procedure for applying this Act to persons subject to statutory management under Reserve Bank of New Zealand Act 1964 [Repealed]
190	Transitional provisions in relation to Part 5A and Part 5C of Reserve Bank of New Zealand Act 1964 [Repealed]
191	Transitional provisions in relation to office holders [Repealed]
192	Transitional provision in relation to accounts of Bank [Repealed]
	Schedule 1 Transitional, savings, and related provisions
	Schedule 2 Remit and monetary policy committee [Repealed]
	Schedule 3 General provisions relating to material incorporated by reference [Repealed]
	Schedule 4 General provisions relating to search warrants issued under Part 5D [Repealed]
	Reserve Bank of New Zealand Amendment Act 1993
	Reserve Bank of New Zealand Amendment Act 2003
	Reserve Bank of New Zealand (Covered Bonds) Amendment Act 2013
	Notes

Title [Repealed]

Title: repealed, on 10 September 2008, by section 4 of the Reserve Bank of New Zealand Amendment Act 2008 (2008 No 59).

New Zealand Legislation

List of access keys

Quick search

My recent searches

Banking (Prudential Supervision) Act 1989

Banking (Prudential Supervision) Act 1989

Note

Contents