Banking (consent to assume or use restricted word or expression) No. A4 of 2019
Banking Act 1959
To: BDB Corporation Limited ABN 62 627 541 011 (the person)
Level 3, 257 Clarence Street, Sydney NSW 2000
SINCE there is no determination in force under section 11 of the Banking Act 1959 (the Act) determining that section 66 of the Act does not apply,
I, Rob Johnson, a delegate of APRA, under paragraph 66(1)(d) of the Act, CONSENT to the assumption or use in Australia by the person, of the restricted word “bank”, in relation to the financial business carried on by the person.
This consent is subject to the conditions I IMPOSE under subsection 66(2) of the Act, specified in the attached Schedule.
This consent commences on the day it is signed.
Dated 14 May 2019
[Signed]
Rob Johnson
General Manager – Licencing (Acting) APRA
Interpretation
In this instrument
APRA means the Australian Prudential Regulation Authority.
banking business has the meaning given in subsection 5(1) of the Act. financial business has the meaning given in subsection 66(4) of the Act. restricted word has the meaning given in subsection 66(4) of the Act.
Note 1 Under subsection 66(1) of the Act, a person who carries on a financial business is guilty of an offence if the person assumes or uses, in Australia, a restricted word or expression in relation to that financial business, where:
(i) subsection 66(1AB) or 66(1AC) do not apply; and
(ii) APRA has not consented to that assumption or use; and
(iii) there is no determination in force under section 11 of the Act determining that subsection 66(1) does not apply to that person.
The maximum penalty is 50 penalty units or, in the case of a body corporate, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 250 penalty units. Under subsection 66(1AA), an offence against subsection 66(1) is committed on the first day on which the offence is committed and on each subsequent day that the circumstances giving rise to the offence continue, including the day of conviction or any later day.
Note 2 Under subsection 66(2) of the Act, APRA may at any time impose conditions, or additional conditions, on a consent or vary or revoke conditions imposed on a consent or revoke a consent.
Note 3 Under subsection 66(3) of the Act, a person who has been given a consent under section 66 and who contravenes a condition applicable to the consent (where there is no applicable determination in force under section 11 of the Act) is guilty of an offence. The maximum penalty is 50 penalty units or, in the case of a body corporate, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 250 penalty units. Under subsection 66(3A) of the Act, an offence against subsection 66(3) is committed on the first day on which the offence is committed and on each subsequent day that the circumstances giving rise to the offence continue, including the day of conviction or any later day.
Note 4 Under subsection 66(2B) of the Act, APRA must notify the Australian Securities and Investments Commission if APRA grants or revokes a consent or imposes, varies or revokes conditions on a consent given under section 66 of the Act.
Schedule – conditions
A. the use of the word ‘bank’ by the person is confined to those acts necessary to apply for and obtain reservation of the company name ‘IN1BANK Limited’ (the company name) with the Australian Securities and Investments Commission (ASIC);
B. the person must notify APRA promptly upon obtaining reservation of the company name with ASIC;
C. the person must not trade under the company name or otherwise assume or use the restricted word ‘bank’ in Australia in relation to its financial business unless APRA grants the person an authority to carry on banking business in Australia under subsection 9(3) of the Act; and
D. If the person withdraws its application for an authority under section 9 of the Act or is advised by APRA that its application has been refused, then the person must request ASIC to deregister the company name within 21 days of withdrawing its application or receiving written notice from APRA that its application has been refused.
Overview
The Banking (Consent to Assume or Use Restricted Word or Expression) No. A4 of 2019 is an instrument issued under the Banking Act 1959 to address the need for regulation around the use of restricted words in the banking industry. Enacted in 2019, this instrument allows the Australian Prudential Regulation Authority (APRA) to consent to the use of restricted words, such as "bank," by non-authorised entities under certain conditions. The enactment by APRA, a delegate of the Commonwealth, aims to ensure that financial businesses comply with regulatory standards and maintain public confidence in the financial system by preventing misleading use of restricted terms. The consent granted in this instrument is subject to specific conditions, which include restrictions on the use of the word "bank" and obligations to notify APRA of significant changes in the business operations.
Scope and Application
The Banking (consent to assume or use restricted word or expression) No. A4 of 2019, issued under the Banking Act 1959, pertains to the use of the term "bank" by BDB Corporation Limited. This Act applies specifically to the entity named, allowing them to use the restricted word "bank" in Australia in relation to their financial business, subject to conditions imposed by a delegate of the Australian Prudential Regulation Authority (APRA). The consent is applicable nationally within Australia and is contingent upon APRA's approval, as no determination under section 11 of the Act exempts the entity from section 66. The Act's scope is limited to the entity’s use of the term in applying for and obtaining the reservation of the company name "IN1BANK Limited" with the Australian Securities and Investments Commission (ASIC), provided certain conditions are met. These conditions include notifying APRA upon reservation of the company name, refraining from trading under the company name or using the restricted word unless authorised by APRA, and deregistering the company name if the application for banking business authorisation is withdrawn or refused. The consent can be varied, imposed, or revoked by APRA, with penalties for non-compliance.
Key Provisions
Section 66 of the Banking Act 1959 sets out the conditions under which a person may use the restricted word “bank” in relation to a financial business in Australia. The Act requires that any person who wishes to use this term must either obtain a determination under section 11 of the Act, which exempts them from the restrictions, or receive consent from APRA. This consent is conditional and subject to specific terms and conditions. Section 66(1) of the Act makes it an offence for a person to use a restricted word without consent or an applicable determination, with penalties for contravention.
The obligations imposed by this legislation on the person, BDB Corporation Limited, include ensuring that the use of the term “bank” is strictly limited to the application for and obtaining of the company name reservation with ASIC, as stipulated in condition A of the attached schedule. Condition B requires BDB Corporation Limited to notify APRA promptly upon obtaining the reservation of the company name with ASIC. Condition C mandates that BDB Corporation Limited must not trade under the company name or use the restricted word “bank” in Australia unless APRA grants an authority under subsection 9(3) of the Act. Lastly, condition D requires BDB Corporation Limited to request ASIC to deregister the company name if the application for banking authority is withdrawn or refused within 21 days of the event.
Failure to comply with the conditions imposed by APRA may result in an offence under subsection 66(3) of the Act. The maximum penalty for such an offence is 50 penalty units, or for a body corporate, a fine of up to 250 penalty units as provided under subsection 4B(3) of the Crimes Act 1914. Additionally, any contravention of the conditions continues to be an offence each day that the contravention continues, including the day of conviction or any later day, as specified in subsection 66(3A) of the Act. Furthermore, APRA is required to notify the Australian Securities and Investments Commission of any consent granted or conditions imposed under section 66 of the Act, as per subsection 66(2B).