Authority to carry on banking business
Banking Act 1959
I, Keith Chapman, a delegate of APRA, under subsection 9(3) of the Banking Act 1959 (the Act), GRANT Bank of Baroda ARBN 125 314 249 authority to carry on banking business in Australia.
Under paragraph 9(4)(a) of the Act, I IMPOSE on this Authority the conditions specified in the attached Schedule.
This Authority commences on the date it is signed.
Dated: 16 October 2012
[Signed]
Keith Chapman
Executive General Manager
Diversified Institutions Division
Interpretation Document ID: 205431
In this Notice
APRA means the Australian Prudential Regulation Authority.
ADI is short for authorised deposit-taking institution and has the meaning given in subsection 5(1) of the Act.
banking business has the meaning given in subsection 5(1) of the Act.
Note 1
Under subsection 9(4) of the Act, APRA may at any time, by notice in writing served on an ADI,
impose conditions or additional conditions or vary or revoke conditions imposed on its Authority to carry on banking business. The conditions must relate to prudential matters.
Note 2
Under subsection 9(6) of the Act, an ADI is guilty of an offence if it does or fails to do an act and
doing or failing to do that act results in a contravention of a condition of the ADI’s Authority, and there is no order in force under section 11 of the Act determining that subsection 9(6) does not apply to the ADI. The penalty is 200 penalty units or, by virtue of subsection 4B(3) of the Crimes Act 1914 in the case of a body corporate, a penalty of up to 1,000 penalty units. By virtue of subsection 9(6A) of the Act, an offence against subsection 9(6) is an indictable offence. Under subsection 9(6B)of the Act, if an ADI commits an offence
against subsection 9(6), the ADI is guilty of an offence against that subsection in respect of the first day on which the offence is committed and each subsequent day (if any) on which the circumstances that gave rise to the ADI committing the offence continue (including the day of conviction for any such offence or any later day).
Note 3
Under subsection 9(9) of the Act, a decision to impose conditions on this Authority is a decision to
which Part VI of the Act applies. If a person whose interests are affected is dissatisfied with that decision, the person may seek reconsideration of the decision by APRA in accordance with section 51B(1) of the Act. The request for reconsideration must be in writing, must state the reasons for the request, and must be given to APRA within 21 days after the decision first comes to the person’s notice or within such further period as APRA allows. If dissatisfied with APRA’s reconsidered decision confirming or varying the first decision, the person may, subject to the Administrative Appeals Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision.
The address where written notice may be given to APRA is 400, George Street, Sydney NSW 2000.
Note 4
Act.
Note 5
The circumstances in which APRA may revoke an ADI's Authority are set out in section 9A of the
Under subsection 9(3) of the Act, a copy of this Notice must be provided to the ADI. Under
subsection 9(7) of the Act, APRA must publish a copy of this Notice in the Gazette and may cause notice of the grant of the Authority to be published in any other way it considers appropriate.
Schedule - the conditions imposed on the Authority
1. The ADI, as a foreign ADI carrying on banking business in Australia, shall not accept deposits or other funds for amounts which are less than $250,000 from any source other than from:
(i) incorporated entities;
(ii) persons or unincorporated entities that are not residents of Australia;
(iii) its own employees; or
(iv) persons or unincorporated entities with an initial balance with the foreign ADI
of at least $250,000.
In this Schedule, foreign ADI has the meaning given in subsection 5(1) of the Act.
Overview
The Banking Act 1959 was enacted by the Parliament of Australia to regulate the banking industry, ensuring the safety and soundness of the financial system and protecting the interests of depositors. This legislation addresses the need for a regulatory framework that maintains public confidence in the banking sector. Keith Chapman, a delegate of the Australian Prudential Regulation Authority (APRA), has exercised the authority granted under subsection 9(3) of the Act to grant Bank of Baroda ARBN 125 314 249 the authority to carry on banking business in Australia. The policy objective is to impose conditions that pertain to prudential matters, ensuring that authorised deposit-taking institutions (ADIs) operate within a robust regulatory environment. These conditions, specified in the attached Schedule, are designed to safeguard the stability and integrity of the financial system. The authority granted is effective from the date of signing, which in this case was 16 October 2012.
Scope and Application
The Banking Act 1959 applies to authorised deposit-taking institutions (ADIs), which include banks and other entities authorised to carry on banking business in Australia. The legislation is applicable nationally across Australia and is enforced by the Australian Prudential Regulation Authority (APRA), a Commonwealth body. The Act specifically authorises APRA to grant an ADI, such as Bank of Baroda, the authority to conduct banking business in Australia, subject to certain conditions. These conditions, as outlined in the attached Schedule, pertain to prudential matters and are designed to ensure the stability and soundness of the financial system. For instance, the conditions may include restrictions on the types of deposits or funds an ADI can accept, particularly for foreign ADIs. The Act provides APRA with the flexibility to impose, vary, or revoke these conditions as necessary. Non-compliance with the conditions can result in significant penalties, with the severity of the penalty depending on whether the offender is an individual or a body corporate. Furthermore, the Act includes provisions for reconsideration and review of APRA's decisions, offering a formal process for ADIs to challenge any conditions imposed on their authority to operate.
Key Provisions
The primary sections of the Banking Act 1959, under which this authority is granted, include sections 9(3) and 9(4). Section 9(3) provides the authority for Keith Chapman, as a delegate of the Australian Prudential Regulation Authority (APRA), to grant Bank of Baroda, an authorised deposit-taking institution (ADI), the right to carry out banking activities in Australia. Section 9(4) allows APRA to impose certain conditions on this authority, which must pertain to prudential matters. This authority is subject to the conditions specified in the attached schedule.
Under this legislation, Bank of Baroda is obligated to adhere to specific conditions imposed by APRA, which primarily relate to the acceptance of deposits. For example, the bank cannot accept deposits or other funds for amounts less than $250,000 from various sources unless they meet certain criteria, such as being from incorporated entities, non-residents, its own employees, or entities with an initial deposit of at least $250,000. These conditions are designed to manage the prudential risks associated with the bank's operations in Australia.
Failure to comply with the conditions imposed on the authority to carry on banking business can result in serious consequences. Under section 9(6) of the Act, an ADI is liable for an offence if it commits or omits to do an act that results in a contravention of the conditions of its authority. The penalty for such an offence can be up to 200 penalty units for individuals and up to 1,000 penalty units for body corporates, as per subsection 4B(3) of the Crimes Act 1914. If the offence continues, the ADI will be guilty of an offence for each day the contravention persists. Additionally, if the ADI is dissatisfied with APRA's decision to impose conditions, they have the right to seek reconsideration or appeal to the Administrative Appeals Tribunal under the Administrative Appeals Act 1975.