Banking Act 1974

Administered by Department of the Treasury

Legislation au C2004A00188 In force Act

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BANKING ACT 1974

No. 132 of 1974

An Act to amend the Banking Act 1959-1973, and for purposes connected therewith.

BE IT ENACTED by the Queen, the Senate and the House of Representatives of Australia, as follows: —

Short title and citation.

1. (1) This Act may be cited as the Banking Act 1974.

(2) The Banking Act 1959-1973 is in this Act referred to as the Principal Act.

(3) The Principal Act, as amended by this Act, may be cited as the Banking Act 1959-1974.

Commencement.

2. This Act shall come into operation on a date to be fixed by Proclamation.

3. Part III of the Principal Act is repealed and the following Part substituted:—

“PART III—FOREIGN EXCHANGE, FOREIGN INVESTMENT,

ETC.

Power to make regulations.

“39. (1) Where the Governor-General considers it expedient to do so for purposes related to—

(a) Foreign exchange or the foreign exchange resources of Australia;

(b) The protection of the currency or the protection of the public credit or revenue of Australia; or

(c) foreign investment in Australia, Australian investment outside Australia, foreign ownership or control of property in Australia or of Australian property outside Australia or Australian ownership or control of property outside Australia or of foreign property in Australia,

he may make regulations, not inconsistent with this Act, in accordance with this section.

“(2) The regulations authorized to be made by this section are regulations (being regulations with respect to matters with respect to which the Parliament has power to make laws) making provision for or in relation to—

(a) Rates of exchange;

(b) the control or prohibition of the buying, borrowing, selling, lending or exchanging in Australia of, or other dealing in Australia with, foreign currency by or on behalf of any person, and of the buying, borrowing, selling, lending or exchanging outside Australia of, or other dealing outside Australia with, foreign currency by or on behalf of a person who is a resident;

(c) The control or prohibition of any transaction that has the effect of or involves a purchase, borrowing, sale, loan or exchange of, or that otherwise relates to, foreign currency, being a transaction that takes place in whole or in part in Australia or to which a person who is a resident is a party;

(d) the control or prohibition of the buying, borrowing, selling, lending or exchanging outside Australia of, or other dealing outside Australia with, Australian currency by or on behalf of any person, and of the buying, borrowing, selling, lending or exchanging in Australia, or other dealing in Australia with, Australian currency by or on behalf of a person who is not a resident;

(e) the control or prohibition of any transaction that has the effect of or involves a purchase, borrowing, sale, loan or exchange of, or that otherwise relates to, Australian currency, being a transaction that takes place in whole or in part outside Australia or to which a person who is not…

Overview

The Banking Act 1974 was enacted by the Queen, the Senate, and the House of Representatives of Australia to amend the Banking Act 1959-1973 and address gaps in the regulatory framework surrounding foreign exchange, foreign investment, and the broader financial ecosystem. The Act empowers the Governor-General to make regulations concerning matters related to foreign exchange, foreign investment, and the control of currency and securities within and outside Australia. The primary objective of the Act is to provide a comprehensive regulatory structure that protects Australia's financial interests and maintains the stability of its currency. The Act also includes provisions for the extraterritorial application of its regulations, ensuring that Australian laws can enforce their reach beyond national borders where necessary. Additionally, the Act ensures the continuity of existing foreign exchange regulations during the transition to the new legislative framework.

Scope and Application

The Banking Act 1974 applies to various entities, including individuals, corporations, and other legal persons, with a particular focus on their dealings in foreign exchange, foreign investment, and other related activities. The Act's jurisdiction extends across the Commonwealth of Australia, and its provisions can be applied both within and outside the country through subordinate regulations. The Act allows the Governor-General to create regulations for matters pertaining to foreign exchange, the protection of Australia’s currency and public credit, and foreign and Australian investments. These regulations can cover a broad range of activities including the control or prohibition of currency transactions, the movement of securities, and the imposition of financial penalties. Notably, the Act includes provisions for extraterritorial application of regulations, meaning they can enforce Australian laws outside of Australia's territorial limits. Additionally, the Act stipulates that any prior foreign exchange regulations continue in force until amended or repealed under the new legislative framework. Furthermore, the Reserve Bank of Australia's authority to grant permissions for certain activities is contingent upon the production of a tax clearance certificate, subject to specific conditions outlined in the Act.

Key Provisions

  • The Banking Act 1974 (C2004A00188) serves to amend the Banking Act 1959-1973 and introduces new provisions related to foreign exchange, foreign investment, and associated regulations. Section 39 of the Act grants the Governor-General the authority to create regulations concerning foreign exchange, the foreign exchange resources of Australia, the protection of currency and public credit, and foreign investment matters. These regulations can include provisions for rates of exchange, the control or prohibition of various currency transactions, and the regulation of the import and export of goods. Additionally, the regulations can specify penalties for violations, which may include fines of up to $100,000 or imprisonment for up to five years.
  • The obligations imposed by the Act on parties and entities primarily revolve around compliance with the regulations made under Section 39. Any person, whether a resident or not, who wishes to engage in activities such as buying, selling, or exchanging foreign or Australian currency must adhere to the regulations. These may include obtaining necessary licenses or permissions from the Reserve Bank and complying with specific conditions set forth in the regulations. Furthermore, Section 39b mandates that certain applications for authority to engage in regulated activities must be accompanied by a tax clearance certificate unless exempted by the Treasurer.
  • In terms of consequences, breaches of the regulations can lead to significant penalties. As stated in Section 39, regulations can prescribe penalties of up to $100,000 in fines or imprisonment for up to five years. Moreover, courts have the authority to order the forfeiture or disposal of property involved in the offence, as per Section 39(q) and (r). Additionally, Section 39a ensures that the regulations apply both within and outside Australia, with relevant courts having jurisdiction over offences committed outside the states. Section 39a also allows for the extraterritorial application of these regulations, ensuring that they are enforceable even when the regulated activities occur outside Australia.
  • Furthermore, Section 4 ensures that existing Banking (Foreign Exchange) Regulations remain in force and can be amended or repealed under the new provisions. This section also validates any actions taken under the old regulations before the Act came into force, ensuring that pre-existing contracts and transactions are not rendered invalid solely due to non-compliance with the old regulations. This provision provides legal continuity and protects parties who acted in good faith prior to the Act’s commencement.

Legal classification tags

Area of Law
Finance & Banking Law
Instrument
Act
Concepts
Definitions & Interpretation
Offence Provisions
Regulatory Standards
Enforcement Powers
Reporting & Disclosure Obligations
Extraterritorial Application

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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.