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 Union Bank of India ABN 17 135 448 047 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 1 December 2015
[Signed]
Keith Chapman
Executive General Manager Specialised Institutions Division
Interpretation Document ID: 220091
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 Level 26, 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, enacted by the Commonwealth Parliament, serves to regulate the banking sector in Australia, ensuring financial stability and protecting depositors. The 2015 Gazette notice from Keith Chapman, a delegate of the Australian Prudential Regulation Authority (APRA), granted Union Bank of India the authority to conduct banking business in Australia. This authority is subject to specific conditions that relate to prudential matters, aiming to mitigate risks associated with foreign banks operating within Australia. The policy objective behind imposing these conditions is to safeguard the financial system and depositors from potential instability that may arise from the operations of foreign banks. Any failure by the authorised deposit-taking institution (ADI) to comply with these conditions could result in significant penalties, reinforcing the importance of adherence to prudential standards.
Scope and Application
The Banking Act 1959 grants Keith Chapman, as a delegate of the Australian Prudential Regulation Authority (APRA), the authority to permit Union Bank of India to engage in banking activities within Australia. This legislation applies specifically to authorised deposit-taking institutions (ADI), with Union Bank of India being granted the authority to operate as a foreign ADI in the country. The Act imposes certain prudential conditions on this authority, which are detailed in the attached Schedule. These conditions are enforceable under the Act and can be altered, varied, or revoked by APRA at any time through written notice. APRA has the power to impose penalties, including fines of up to 200 penalty units for individuals and up to 1,000 penalty units for corporate bodies, for any contravention of these conditions. Additionally, APRA must notify the ADI and publish the notice of any changes in the Gazette or through other appropriate means. The authority granted under this Act is subject to the provisions of Part VI of the Banking Act 1959, which allow for reconsideration and appeal processes for any dissatisfied parties.
Key Provisions
The key operative sections of the Banking Act 1959, as evidenced by the authority granted to Union Bank of India under section 9(3), allow the Australian Prudential Regulation Authority (APRA) to grant authorisation to an Authorised Deposit-Taking Institution (ADI) to carry out banking activities within Australia. Section 9(4) of the Act provides APRA with the power to impose specific conditions on the authority to operate, which must be prudential in nature. The authority to carry on banking business commences on the date the notice is signed.
Under the authority granted, Union Bank of India is subject to specific conditions outlined in the attached schedule. These conditions include, but are not limited to, restrictions on the acceptance of deposits or other funds from certain sources unless they meet specific criteria, such as being from incorporated entities or non-residents, among others. The bank must adhere to these conditions to ensure compliance with the prudential standards set by APRA.
APRA imposes several obligations on the parties governed by the Act. The bank must not only comply with the conditions specified in the authority but also ensure that any contravention of these conditions is avoided. This includes meticulously adhering to the stipulated thresholds for accepting deposits and other funds from various sources. Failure to comply with these conditions could lead to serious repercussions, including potential criminal and civil penalties.
The Act also outlines potential offences and penalties for non-compliance. Under section 9(6) of the Act, an ADI is liable to an offence if it contravenes a condition of its authority, with the penalty being 200 penalty units or, in the case of a body corporate, up to 1,000 penalty units. The offence is considered indictable, and the ADI can be held liable for each day the contravention continues. Additionally, section 9(6B) stipulates that the offence is ongoing for each subsequent day the contravention persists, even post-conviction. The Act also provides avenues for reconsideration and appeal for those dissatisfied with APRA's decisions regarding the imposition or variation of conditions.