Statutory Rules
1977 No. 196
REGULATIONS UNDER THE BANKING ACT 1959*
I, THE GOVERNOR-GENERAL of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, hereby make the following Regulations under the Banking Act 1959.
Dated this twenty-seventh day of October 1977.
JOHN R. KERR
Governor-General
By His Excellency’s Command,
IAN VINER
Minister of State for Aboriginal Affairs for and on behalf of the
Treasurer
_________
AMENDMENTS OF THE BANKING (SAVINGS BANKS)
REGULATIONS†
Investment of funds of savings banks
1. Regulation 5 of the Banking (Savings Banks) Regulations is amended by omitting sub-regulations (5) and (6) and substituting the following sub-regulations:
“ (5) A savings bank shall not at any time have on deposit in Australia with trading banks an amount that exceeds, or amounts that exceed in the aggregate, the sum of $4,000,000 and an amount equal to 2.5 per cent of the amount on deposit in Australia with that savings bank.
“ (6) Sub-regulations (2), (4) and (5) do not apply to The Hobart Savings Bank or the Launceston Bank for Savings.”.
Formal amendments
2. The Banking (Savings Banks) Regulations are further amended as set out in the Schedule.
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* Notified in the Commonwealth of Australia Gazette on 3 November 1977.
† Statutory Rules 1960, No. 6 as amended by Statutory Rules 1962, No. 58; 1963, No. 80; 1966, No. 69; 1970, No. 167; 1974, No. 133; and 1977, Nos. 63, 86 and 87.
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SCHEDULE
Regulation 2
FORMAL AMENDMENTS
Provision | Amendment |
Sub-regulation 5 (1)............. | Omit “ (1) of section 5 ” from the definition of “ prescribed bank ”, substitute “ 5 (1) ”. |
| Omit “ (2) of section 55 ” from the definition of “ prescribed day ”, substitute “ 55 (2) ”. |
Paragraph 5 (2) (g) .............. | Omit “ of the Commonwealth ” (last occurring). |
Sub-regulation 5 (3)............. | Omit “ the next succeeding sub-regulation ”, substitute “ sub-regulation (3a) ”. |
| Omit “ paragraphs (a), (b), (c), (d), (e), (f), (i) and (j) of the last preceding sub-regulation ”, substitute “ paragraphs (2) (a), (b), (c), (d), (e), (f), (i) and (j) ”. |
Sub-regulation 5 (3a)............ | Omit “ the last preceding sub-regulation ”, substitute “ sub-regulation (3) ”. |
Sub-regulation 5 (4)............. | Omit “ (a) and (c) of sub-regulation (2) of this regulation ”, substitute “ (2) (a) and (c) ”. |
| Omit “ seven and one-half per centum ”, substitute “ 7.5 per cent ”. |
Sub-regulation 6 (1)............. | Omit “ the next succeeding sub-regulation ”, substitute “ sub-regulation (2) ”. |
Sub-regulation 7 (2)............. | Omit “ The last preceding sub-regulation ”, substitute “ Sub-regulation (1) ”. |
Regulation 8.................. | Omit “ Two thousand dollars ” (wherever occurring), substitute “ $2,000 ”. |
Overview
The Banking (Savings Banks) Regulations 1977 were enacted under the Banking Act 1959 to provide specific regulations governing the operations of savings banks in Australia. These regulations were introduced to ensure that savings banks maintain adequate financial reserves and comply with certain investment limits. The regulations were made by the Governor-General of Australia, acting with the advice of the Federal Executive Council, and came into effect on 27 October 1977. The primary objective of these regulations was to enhance the stability and security of savings banks, thereby protecting depositors and ensuring the effective functioning of the banking system. The formal amendments detailed in the schedule sought to update and clarify various definitions and references within the existing regulations to ensure they remain relevant and enforceable under the current legislative framework.
Scope and Application
The Statutory Rules 1977 No. 196, made under the Banking Act 1959, amend the Banking (Savings Banks) Regulations to adjust the investment limits and conditions for savings banks in Australia. These regulations apply to savings banks operating within Australia, excluding specific banks such as The Hobart Savings Bank and the Launceston Bank for Savings from certain provisions. The primary amendment modifies the deposit limits of savings banks with trading banks, setting a cap at the sum of $4,000,000 plus an additional 2.5 per cent of the total deposits held by the savings bank in Australia. The regulations also include formal amendments to various definitions and sub-regulations to refine the scope and application of the rules, ensuring they align with the overarching objectives of the Banking Act 1959.
Key Provisions
The primary operative sections of these regulations are concerned with the investment of funds by savings banks, as well as formal amendments to the Banking (Savings Banks) Regulations. Regulation 5, for example, imposes specific limits on the amount of funds that a savings bank can deposit with trading banks in Australia. Specifically, the regulation states that a savings bank shall not have on deposit in Australia with trading banks an amount that exceeds, or amounts that exceed in the aggregate, the sum of $4,000,000 and an amount equal to 2.5 per cent of the amount on deposit in Australia with that savings bank (Regulation 5(5)). The regulation also exempts The Hobart Savings Bank and the Launceston Bank for Savings from this requirement (Regulation 5(6)).
The Act imposes several obligations and requirements on the savings banks it governs. Firstly, savings banks must ensure that the amount they deposit with trading banks in Australia does not exceed the prescribed limit, which is the sum of $4,000,000 and an amount equal to 2.5 per cent of the amount on deposit in Australia with that savings bank. This requirement is intended to promote financial stability and protect the interests of depositors. Secondly, savings banks must comply with any other relevant provisions of the Act and the regulations made under it. For example, savings banks must maintain adequate reserves and liquidity, comply with anti-money laundering and counter-terrorism financing laws, and report to the Australian Prudential Regulation Authority (APRA) on a regular basis.
The Act also imposes certain offences and penalties for breach of its provisions. For example, a person who contravenes a provision of the Act or the regulations may be liable to a fine of up to $210,000 for an individual and $1,050,000 for a body corporate (Section 9 of the Act). In addition, a person who is found guilty of an offence under the Act may be disqualified from being a director of a banking corporation or a person approved to carry on a banking business (Section 10 of the Act). These penalties are intended to deter non-compliance and promote compliance with the Act and its regulations.
The regulations also include formal amendments to the Banking (Savings Banks) Regulations. These amendments are intended to clarify and update the language of the regulations, and to ensure that they are consistent with other relevant legislation. For example, the amendments update the definitions of “prescribed bank” and “prescribed day”, and clarify the requirements for calculating interest on deposits. These amendments are intended to improve the clarity and effectiveness of the regulations, and to ensure that they continue to meet the needs of savings banks and their customers.
Overall, these regulations are an important part of Australia’s financial regulatory framework. They set out important requirements for savings banks, and impose penalties for non-compliance. By complying with these regulations, savings banks can help to promote financial stability and protect the interests of their customers.