EXPLANATORY STATEMENT
STATUTORY RULES 1986 NO. 392
ISSUED BY THE AUTHORITY OF THE TREASURER
BANKING ACT 1959
BANKING (SAVINGS BANKS) REGULATIONS (AMENDMENTS)
Section 71 of the Banking Act 1959 (the Act) empowers the Governor-General to make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed for carrying out or giving effect to the Act.
Section 37 of the Act provides that Regulations made under the Act shall include provisions for certain matters, including:
• defining the banks with which savings banks may place money on deposit or to which they may lend money;
• defining the classes of persons from whom savings banks may not accept deposits.
Regulation 6 of the Banking (Savings Banks) Regulations prohibited a savings bank from accepting deposits from another savings bank. When in 1982 the previous restrictions on savings banks accepting deposits from commercial enterprises were relaxed, it was intended to impose the minimum restriction in practice while still complying with Section 37 of the Act, and so it was decided to confine the class of persons from whom savings banks could not accept deposits to other savings banks. However, Regulation 6 placed an unnecessary constraint on the activities of two savings banks which are members of one banking group. Accordingly, the Regulation 6 has been amended to permit a savings bank to accept deposits from another savings bank which is a member of the same banking group. In amending Regulation 6 it was necessary to make a similar amendment to Regulation 4, a complementary provision which stipulates those banks to which a savings bank may make loans or with which it may place money on deposit.
Details of the amended Regulations is as follows:
• Regulation 4 was amended to allow a savings bank to place money on deposit with or lend money to a savings bank which is its wholly-owned subsidiary or of which it is a wholly-owned subsidiary, while continuing otherwise not to allow deposits with or loans to other savings banks.
• Regulation 6 was amended to allow a savings bank to accept deposits from a savings bank which is its wholly owned subsidiary or of which it is a wholly-owned subsidiary.