Banking Act 1947

Legislation au C1947A00057 Not in force Act

Legislation content

BANKING.

 

No. 57 of 1947.

An Act relating to Banking and for other purposes.

[Assented to 27th November, 1947.]

BE it enacted by the King’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—

Part I.—Preliminary.

Short title.

1. This Act may be cited as the Banking Act 1947.

Commencement.

2. This Act shall come into operation on the day on which it receives the Royal Assent.

Objects.

3. The several objects of this Act include—

(a) the expansion of the banking business of the Commonwealth Bank as a publicly-owned bank conducted in the interests of the people of Australia and not for private profit;

(b) the taking over by the Commonwealth Bank of the banking business in Australia of private banks and the acquisition on just terms of property used in that business;

(c) the prohibition of the carrying on of banking business in Australia by private banks.


Paris.

4. This Act is divided into Parts, as follows:—

Part I.—Preliminary.

Part II.—Legislative Intent.

Part III.—Application of Act.

Part IV.—Expansion of Banking Business of Commonwealth Bank.

Division 1.—Preliminary.

Division 2.—Acquisition of Shares in Private Banks.

Division 3.—Management of Private Banks.

Division 4.—Taking over of Businesses of Private Banks.

Part V.—The Federal Court of Claims.

Part VI.—Assessment of Compensation.

Division 1.—Compensation in respect of the Acquisition of Shares.

Division 2.—Compensation in respect of the Acquisition of Assets.

Part VII.—Prohibition of the Carrying on of Banking Business by Private Banks.

Part VIII.—Protection of Eights of Persons Employed by Private Banks.

Part IX.—General.

Definitions.

5. In this Act, unless the contrary intention appears—

“assets” means real and personal property of every kind, including—

(a) rights under contracts and agreements;

(b) books, books of account and records;

(c) choses in action; and

(d) all other rights, interests and claims in or to real or personal property, whether liquidated or unliquidated, certain or contingent, accrued or accruing,

but does not include any right to a refund of taxation under any law in force in Australia or elsewhere;

“Australia” includes the Territories under the authority of the Commonwealth;

“Australian assets” means assets situated, or deemed by law to be situated, in Australia;

“Australian liabilities” means liabilities situated, or deemed by law to be situated, in Australia;

“Australian private bank” means a private bank which was formed within the limits of the Commonwealth and the name of which is set out in Part I. of the First Schedule;

“Australian shares” means shares situated, or deemed by law to be situated, in Australia;

“liabilities” includes obligations under contracts or agreements but does not include—

(a) any liability of a private bank to a director or member of that private bank in his capacity as such a…

Overview

The Banking Act 1947 was enacted to address the need for a public banking system in Australia and to prohibit private banks from conducting banking business in the country. This Act was introduced by the Parliament of Australia and seeks to expand the Commonwealth Bank of Australia as a publicly-owned institution while preventing private banks from operating within Australia. The Act facilitates the Commonwealth Bank’s acquisition of private banks' shares and assets, ensuring the continuity of banking services and the protection of employees’ rights and benefits. Additionally, it establishes the Federal Court of Claims to handle compensation claims arising from the compulsory acquisition of private banks' assets and shares by the Commonwealth Bank.

Scope and Application

The Banking Act 1947 applies to the Commonwealth Bank of Australia, the private banks specified in the First Schedule, and the territories under the authority of the Commonwealth, excluding state banks. The Act provides for the expansion of the Commonwealth Bank’s banking business, the acquisition of shares and assets from specified private banks, and the prohibition of banking business by private banks in Australia. The Commonwealth Bank is empowered to purchase shares and assets of these private banks, with fair compensation to be paid to the shareholders and the private banks. The Act also establishes the Federal Court of Claims to determine compensation claims. It further provides for the continuation of employment terms for employees of the affected private banks, including the preservation of their pension benefits. The Commonwealth Bank is mandated to observe customary banking practices and usages, except as otherwise required by law. The Commonwealth guarantees the payment of all compensation under the Act.

Key Provisions

  • The Banking Act 1947, primarily, governs the expansion and regulation of the Commonwealth Bank of Australia and the prohibition of banking business by private banks. Section 9 outlines that the powers specified in Divisions 2 and 3 of Part IV are conferred to facilitate the control by the Commonwealth Bank of the banking business in Australia of private banks and to further the expansion of the Commonwealth Bank's business. Section 11 mandates that the Commonwealth Bank must provide adequate banking facilities, conduct business without discrimination, and observe customary banking practices. Section 12 allows the Commonwealth Bank to purchase shares in private banks, subject to the Treasurer's approval, at a price not less than the market value. Section 13 permits the compulsory acquisition by the Commonwealth Bank of Australian shares in Australian private banks. Section 22 enables the Treasurer to invite private banks to negotiate agreements for the Commonwealth Bank to take over their Australian business. Section 24 mandates the takeover of a private bank's Australian business by the Commonwealth Bank if no agreement is reached by the specified date.
  • The Act imposes obligations on the Commonwealth Bank, including observing customary banking practices (Section 11), paying fair compensation for shares and property acquired (Sections 15, 25), and continuing the employment of private bank employees with unchanged terms and conditions (Sections 48, 49, 51). It also requires private banks to permit inspections of their property and records (Section 59) and to assist in the transfer of their business to the Commonwealth Bank (Section 60).
  • Breaches of the Act may result in significant penalties. Section 24 imposes a penalty of ten thousand pounds for each day a contravention occurs, while Section 59 imposes a penalty of ten thousand pounds for each day a contravention occurs if committed by a private bank, or one thousand pounds for each day if committed by any other person. Section 60 stipulates that failure to comply with a direction from the High Court is punishable as a contempt of court.
  • The Commonwealth Bank is liable to pay compensation for the acquisition of shares and property, as stipulated in Sections 15 and 25. Section 61 guarantees the payment of all compensation payable by the Commonwealth Bank under the Act. Regulations may be made to prescribe penalties not exceeding a fine of one thousand pounds for offences against the regulations, as stated in Section 62.

Legal classification tags

Area of Law
Commercial Law
Corporate Law & Governance
Instrument
Act
Concepts
Commencement Provisions
Definitions & Interpretation
Licensing & Registration
Reporting & Disclosure Obligations
Enforcement Powers
Compensation & Redress

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.