Authority to carry on banking business in Australia
Banking Act 1959
To: Intesa Sanpaolo SPA ABN 46 156 153 829 (the body corporate)
SINCE the body corporate has applied for an authority to carry on banking business in Australia,
I, Therese McCarthy Hockey, a delegate of APRA:
(a) under subsection 9(3) of the Banking Act 1959 (the Act), GRANT the body corporate an authority to carry on banking business in Australia; and
(b) under paragraph 9AA(1)(a) of the Act, IMPOSE conditions on the authority, as specified in the schedule.
This instrument commences on the day it is made. Dated: 17 December 2020
[Signed]
Therese McCarthy Hockey Executive Director Banking Division
Interpretation
In this instrument:
APRA means the Australian Prudential Regulation Authority.
banking business has the meaning given in subsection 5(1) of the Act.
Notes
APRA is required to publish this instrument in the Gazette.
A decision to impose conditions on an authority is a decision to which Part VI of the Act applies. You may request APRA reconsider the decision in accordance with subsection 51B(1) of the Act. The request for reconsideration must be made in writing, must state the reasons for the request, and must be given to APRA within 21 days after the day on which you first received notice of this decision, or within such further period as APRA allows. If you are dissatisfied with the outcome of APRA’s reconsideration of the decision, you may, subject to the Administrative Appeals Tribunal 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.
Schedule – conditions on authority
The body corporate, 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:
(a) incorporated entities;
(b) persons or unincorporated entities that are not residents of Australia;
(c) its own employees; or
(d) persons or non-incorporated entities with an initial balance with the foreign ADI of at least $250,000.
Interpretation
In this schedule:
foreign ADI has the meaning given in subsection 5(1) of the Act.
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Overview
The Banking Act 1959 governs the banking sector in Australia, providing a regulatory framework to ensure the stability and integrity of the financial system. The Act was enacted to address the need for a comprehensive legislative framework governing the banking industry, including the oversight of authorised deposit-taking institutions (ADIs). This legislation is administered by the Australian Prudential Regulation Authority (APRA), which is responsible for the prudential supervision of financial institutions. The primary policy objective of the Act is to maintain a safe and sound banking system, protect consumers, and promote confidence in the financial system. The authority granted under this Act enables APRA to regulate and impose conditions on banking businesses, including foreign ADIs, to ensure compliance with the regulatory requirements.
On 17 December 2020, Therese McCarthy Hockey, as a delegate of APRA, granted Intesa Sanpaolo SPA, an Italian banking institution, an authority to carry on banking business in Australia under the Banking Act 1959. This authority is subject to specific conditions imposed by APRA, as outlined in the schedule attached to the instrument. The conditions, applicable to foreign ADIs, include restrictions on accepting deposits or other funds for amounts less than $250,000 from certain sources, such as non-residents and unincorporated entities, unless specific criteria are met. These conditions aim to mitigate potential risks associated with foreign banking operations in Australia while ensuring the continued stability and integrity of the nation's financial system.
Scope and Application
The Banking Act 1959 provides the legislative framework for the authorisation and regulation of banking businesses in Australia, and under its provisions, the Australian Prudential Regulation Authority (APRA) has the authority to grant and impose conditions on authorities for entities to carry on banking business within Australia. In this instance, the Act applies to Intesa Sanpaolo SPA, a foreign authorised deposit-taking institution (ADI) that has applied for an authority to conduct banking business in Australia. The authority granted by APRA under the Act allows Intesa Sanpaolo SPA to operate as a bank within the Australian jurisdiction, subject to the conditions outlined in the attached schedule. These conditions include restrictions on the acceptance of deposits or funds from certain sources, ensuring that the foreign ADI only accepts deposits or other funds for amounts of at least $250,000 from specific entities or individuals such as incorporated entities, non-resident persons or unincorporated entities, its own employees, or persons or non-incorporated entities with an initial balance of at least $250,000. The authority granted and the conditions imposed are effective immediately upon the making of this instrument.
Key Provisions
The main operative sections of the legislation (C2021G00024) grant Intesa Sanpaolo SPA an authority to carry on banking business in Australia under subsection 9(3) of the Banking Act 1959 (the Act). This authority is granted by Therese McCarthy Hockey, a delegate of the Australian Prudential Regulation Authority (APRA). Additionally, paragraph 9AA(1)(a) of the Act imposes specific conditions on this authority, which are outlined in the accompanying schedule. These conditions are designed to regulate the manner in which the foreign ADI can accept deposits and other funds in Australia. The instrument becomes effective on the date of its issuance, which is 17 December 2020.
The obligations and requirements imposed by the Act on Intesa Sanpaolo SPA, as a foreign authorised deposit-taking institution (ADI) carrying on banking business in Australia, are explicitly detailed in the schedule. The foreign ADI is restricted in the sources from which it can accept deposits or other funds under $250,000. Specifically, it cannot accept such deposits or funds from individuals or unincorporated entities that are residents of Australia. Instead, it is limited to accepting deposits or funds from incorporated entities, non-resident persons or unincorporated entities, its own employees, or from non-resident persons or unincorporated entities with an initial deposit of at least $250,000. This ensures that the foreign ADI adheres to stringent regulatory standards to maintain financial stability.
The legislation also outlines potential consequences for breach of the conditions imposed on the authority. Although the specific penalties are not detailed within the text, the Banking Act 1959 likely provides for both civil and criminal penalties for non-compliance. Civil penalties may include fines, while criminal penalties could result in imprisonment, depending on the severity and intent behind the breach. The Administrative Appeals Tribunal Act 1975 further provides a mechanism for the foreign ADI to seek review of any decision by APRA, including the imposition of conditions on the authority. This ensures that there are avenues for appeal and judicial oversight should the foreign ADI believe that the conditions are unjust or overly restrictive.