Authority to carry on banking business
Banking Act 1959
I, Louis Serret, a delegate of APRA, under subsection 9(3) of the Banking Act 1959 (the Act), GRANT China Merchants Bank Co., Ltd. ABN 96 609 857 383 (the ADI), 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 June 2017
[Signed]
Louis Serret
Acting Executive General Manager Specialised Institutions Division
Interpretation Document ID: 226895
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 maximum 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 fine 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 Level 12, 1 Martin Place, 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, enacted by the Parliament of Australia, addresses the regulation and oversight of authorised deposit-taking institutions (ADIs) to ensure the stability and integrity of the financial system. This Act empowers the Australian Prudential Regulation Authority (APRA) to grant and regulate ADIs, including foreign banks operating in Australia, ensuring they meet prudential standards. The Act was designed to fill the gap in providing a comprehensive framework for the supervision of banking entities to protect depositors and maintain financial stability. The policy objective of the Act is to safeguard the financial system by imposing stringent regulatory conditions on ADIs, ensuring they adhere to prudential standards that protect the interests of depositors and the broader economy. The Act provides APRA with the authority to impose, vary, or revoke conditions on an ADI's authority to carry on banking business, specifically related to prudential matters, thereby maintaining the robustness of the banking sector.
Scope and Application
The Banking Act 1959, as applied by the Australian Prudential Regulation Authority (APRA), governs the authority for authorised deposit-taking institutions (ADI) to carry on banking business in Australia. This legislation applies specifically to entities such as China Merchants Bank Co., Ltd., which has been granted authority to operate in the Australian banking sector. The Act imposes certain conditions on such institutions, particularly concerning prudential matters, which are outlined in a Schedule attached to the authority. These conditions are enforceable under the Act, with penalties for non-compliance, and can be imposed, varied, or revoked by APRA at any time. The Act's jurisdictional reach is national, applying across Australia, and it allows for the extension or restriction of its application through subordinate instruments. The authority granted under the Act is subject to specific exclusions and exemptions, such as the limitation on the acceptance of deposits or funds under certain conditions. APRA is responsible for ensuring compliance and may revoke the authority if necessary, with the process for seeking reconsideration or review outlined in the Act and the Administrative Appeals Act 1975.
Key Provisions
The key sections of the Banking Act 1959, as applied in this Notice, provide authority for China Merchants Bank Co., Ltd. to carry on banking business in Australia, subject to specific conditions imposed by the Australian Prudential Regulation Authority (APRA). Section 9(3) of the Act grants APRA the authority to grant an authorised deposit-taking institution (ADI) permission to operate in Australia. In this case, Louis Serret, acting on behalf of APRA, has granted China Merchants Bank Co., Ltd. this authority, subject to the conditions outlined in the attached Schedule. The authority commences on the date it is signed, which is 16 June 2017.
The conditions imposed on China Merchants Bank Co., Ltd. require that it does not accept deposits or other funds for amounts less than $250,000 from sources other than incorporated entities, non-residents of Australia, its own employees, or entities with an initial balance of at least $250,000. These conditions are intended to manage prudential risks associated with the bank's operations in Australia. Under subsection 9(4) of the Act, APRA has the power to impose, vary, or revoke these conditions at any time, as long as they relate to prudential matters. APRA must also publish a copy of this Notice in the Gazette and may choose to publish it in other appropriate ways.
Parties governed by this Act, such as China Merchants Bank Co., Ltd., must adhere to the conditions specified in the Schedule. This includes ensuring that the bank does not accept deposits or other funds under the specified limits from the prohibited sources. Failure to comply with these conditions can result in serious legal consequences. Under subsection 9(6) of the Act, an ADI can be found guilty of an offence if it fails to comply with the conditions of its Authority, leading to a contravention. The maximum penalty for such an offence is 200 penalty units, or for a body corporate, a fine of up to 1,000 penalty units. If the contravention continues, the ADI is guilty of an offence for each day the contravention persists. Furthermore, under subsection 9(6A), an offence against subsection 9(6) is classified as an indictable offence, and the ADI is liable for each day the offence continues, up to and including the day of conviction.
If a person affected by a decision to impose conditions on their Authority under this Act is dissatisfied, they may seek reconsideration from APRA within 21 days of becoming aware of the decision, or within any extended period allowed by APRA. If still dissatisfied with APRA's decision, they may apply to the Administrative Appeals Tribunal for review. The conditions and penalties outlined in the Act ensure that ADIs operate within the regulatory framework designed to protect the stability and integrity of the Australian banking system.