Authority to carry on banking business
Banking Act 1959
I, Brandon Kong Leong Khoo, a delegate of APRA, under subsection 9(3) of the Banking Act 1959 (the Act), GRANT Korea Exchange Bank Co., Ltd ARBN 164 085 563 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 December 2013
[Signed]
Brandon Kong Leong Khoo Executive General Manager Specialised Institutions Division
Interpretation Document ID: 211723
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 St, 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 Australian Parliament, establishes the legal framework for the operation of banking institutions within Australia. This legislation was introduced to address the need for a robust regulatory environment that ensures the stability and integrity of the banking sector. A key gap it aimed to fill was the regulation of authorised deposit-taking institutions (ADIs), including foreign banks operating within Australia, to protect depositors and maintain financial system stability. Under the authority delegated to the Australian Prudential Regulation Authority (APRA) by the Act, the Authority can impose conditions on ADIs to ensure compliance with prudential standards. In the specific case of the Korea Exchange Bank Co., Ltd., APRA has granted the institution authority to carry out banking business in Australia, subject to specified conditions aimed at safeguarding the financial interests of depositors and maintaining the overall health of the banking sector. The policy objective is to provide a regulatory environment that supports the safe and sound operation of banking institutions while protecting consumers and the financial system.
Scope and Application
The Banking Act 1959 applies to authorised deposit-taking institutions (ADI), which includes entities like Korea Exchange Bank Co., Ltd, authorised to carry on banking business in Australia. Under subsection 9(3) of the Act, the Australian Prudential Regulation Authority (APRA) has the authority to grant an ADI the necessary permissions to operate, and in this case, APRA has authorised Korea Exchange Bank Co., Ltd to conduct banking business in Australia. This authorisation is accompanied by specific conditions that the bank must adhere to, such as restrictions on the acceptance of deposits or funds under certain thresholds, as outlined in the attached Schedule. The Act imposes these conditions to maintain prudential standards and ensure the stability of the banking sector. Furthermore, under subsection 9(6) of the Act, any failure to comply with the conditions of the authority can result in an offence with significant penalties, underscoring the importance of adherence to regulatory requirements. The jurisdictional reach of this authorisation and the conditions imposed is within Australia, and APRA retains the ability to impose, vary, revoke, or enforce conditions as necessary through written notices and subordinate instruments.
Key Provisions
The main operative sections of this legislation, found in subsection 9(3) of the Banking Act 1959, grant Korea Exchange Bank Co., Ltd, with ARBN 164 085 563, the authority to carry out banking business in Australia. This authority is subject to specific conditions as detailed in the attached Schedule. These conditions, as per paragraph 9(4)(a) of the Act, are imposed by Brandon Kong Leong Khoo, a delegate of APRA. These conditions pertain to prudential matters and are designed to regulate the manner in which the bank can operate within the Australian financial system.
The obligations imposed on Korea Exchange Bank Co., Ltd include adherence to the conditions outlined in the Schedule. Specifically, as a foreign authorised deposit-taking institution (ADI), the bank must not accept deposits or other funds for amounts less than $250,000 from sources other than incorporated entities, non-resident persons or unincorporated entities, its own employees, or those with an initial balance of at least $250,000 with the bank. These conditions are critical for maintaining financial stability and ensuring that the bank's operations comply with prudential standards set forth by APRA.
Should Korea Exchange Bank Co., Ltd fail to comply with the conditions imposed on its banking authority, it may be guilty of an offence under subsection 9(6) of the Banking Act 1959. The penalty for such an offence is substantial, with a maximum fine of 200 penalty units for individuals and up to 1,000 penalty units for a body corporate, as stipulated in subsection 4B(3) of the Crimes Act 1914. Furthermore, under subsection 9(6A) of the Act, any offence against subsection 9(6) is classified as an indictable offence, and the bank could be liable for the offence on each day it continues, up until conviction or beyond. The legal framework also allows for reconsideration of APRA's decisions and the possibility of applying to the Administrative Appeals Tribunal for review if dissatisfied with APRA's reconsidered decision.