Banking (Savings Banks) Regulations

Administered by Department of the Treasury

Legislation au F1997B01878 Regulations Not in force Legislative Instrument

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Banking (Savings Bank) Regulations

Statutory Rules 1960 No. 6 as amended

made under the

Banking Act 1959

This compilation was prepared on 10 July 2002
taking into account amendments up to SR 1988 No. 233

Prepared by the Office of Legislative Drafting,
Attorney-General’s Department, Canberra

Contents

1 Citation [see Note 1]

2 Commencement [see Note 1]

3 Moneys owing by a trading bank to a savings bank deemed to be on deposit

4 Banks with which savings banks may deposit money

5 Investment of funds of savings banks

6 Persons from whom savings banks not to accept deposits

7 Persons who may draw cheques on accounts maintained with a savings bank

8 Penalties

Schedule Corporations referred to in the definition of authorized dealer in the short-term money market

Notes

1 Citation [see Note 1]

These Regulations may be cited as the Banking (Savings Banks) Regulations.

2 Commencement [see Note 1]

These Regulations shall come into operation on the day on which Part II of the Banking Act 1959 comes into operation.

3 Moneys owing by a trading bank to a savings bank deemed to be on deposit

For the purposes of these Regulations, money shown in the books of a savings bank kept in relation to its business in Australia as being moneys owing by a trading bank to the savings bank shall be deemed to be money on deposit in Australia with that trading bank.

4 Banks with which savings banks may deposit money

(1) A savings bank may in the course of carrying on banking business in Australia, place money on deposit with or lend money to:

(a) a savings bank that is a wholly owned subsidiary of the first-mentioned savings bank;

(b) a savings bank of which the first-mentioned savings bank is a wholly owned subsidiary; or

(2) In subregulation (1), a reference to a bank shall be read as a reference to a person carrying on the business of banking.

5 Investment of funds of savings banks

(1) In this regulation:

authorized dealer in the short-term money market means a corporation that is specified in the Schedule and deals in securities (including securities issued by the Commonwealth), borrows money for that purpose for short periods and has an arrangement with the Reserve Bank to facilitate the borrowing of money for short periods for the purpose of dealing in securities (including securities issued by the Commonwealth).

prescribed bank means a bank as defined in subsection 5 (1) of the Banking Act 1959 or a bank constituted by a State Act.

prescribed day, in relation to a savings bank, means a day in each month applicable in relation to the savings bank by reason of a notice given under subsection 55 (2) of the Banking Act 1959.

(2) A savings bank shall at all times maintain in investments of the following kinds an amount that, together with cash on hand in Australia, is not less than the amount on deposit in Australia with the savings bank:

(a) deposits with the Reserve Bank;

(b) deposits with and loans to prescribed banks;

(d) other securities issued by the Commonwealth;

(e) securities issued by a State;

(f) bills of exchange (other than cheques) drawn by, promissory notes issued by, and debentures, stock and bonds issued or guaranteed by, an authority (not being a prescribed bank) of the Commonwealth or of a State or Territory;

(f) securities issued or guaranteed by an authority (not being a prescribed bank) constituted by or under an Act or a State Act;

(g) loans the repayment of which is guaranteed by, or by a person acting for and on behalf of, the Commonwealth, a State or a Territory;

(h) loans for housing or other purposes on the security of land in Australia; and

(i) secured loans to authorized dealers in the short-term money market.

(2AA) A savings bank may, in respect of an amount not exceeding 40 per cent of the amount on deposit in Australia with the savings bank, being an amount that the savings bank is required, under subregulation (2), to maintain in investments of the kinds specified in that subregulation, maintain that amount, instead, in other investments, not being investments in land, buildings, furniture or equipment used, or to be used, by the bank in the conduct of its business.

(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) Subregulations (2), (2AA), (3), (4) and (5) do not apply to The Hobart Savings Bank or the Launceston Bank for Savings.

(7) For the purposes of this regulation, interest credited by a savings bank to the account of a depositor with the savings bank shall be deemed to be an amount on deposit with the savings bank.

6 Persons from whom savings banks not to accept deposits

A savings bank shall not accept deposits from another savings bank other than:

(a) a savings bank that is a wholly owned subsidiary of the first-mentioned savings bank; or

(b) a savings bank of which the first-mentioned savings bank is a wholly owned subsidiary.

7 Persons who may draw cheques on accounts maintained with a savings bank

A person authorized to operate on an account maintained with a savings bank may be permitted by the bank to draw cheques on that account.

8 Penalties

A savings bank that contravenes or fails to comply with a provision of these Regulations is guilty of an offence punishable, upon conviction, by a penalty not exceeding $2,000 or, in the case of a continuing offence, not exceeding $2,000 for each day during which the offence continues.

Schedule Corporations referred to in the definition of authorized dealer in the short-term money market

(subregulation 5 (1))

ALL-STATES DISCOUNT LIMITED

COLONIAL MUTUAL DISCOUNT COMPANY LIMITED

FIRST FEDERATION DISCOUNT CO. LIMITED

GIO SECURITIES LIMITED

HOLST DISCOUNT LIMITED

NDC SECURITIES LIMITED

PP DISCOUNTLIMITED

SHORT TERM ACCEPTANCES LIMITED

TRANS CITY DISCOUNT LIMITED

Notes to the Banking (Savings Bank) Regulations

Note 1

The Banking (Savings Bank) Regulations (in force under the Banking Act 1959) as shown in this compilation comprise Statutory Rules 1960 No. 6 amended as indicated in the Tables below.

Table of Statutory Rules

Year and number	Date of notification in Gazette	Date of commencement	Application, saving or transitional provisions
1960 No. 6	11 Jan 1960	14 Jan 1960 (a)
1962 No. 58	13 July 1962	13 July 1962	—
1963 No. 80	16 Aug 1963	16 Aug 1963	—
1966 No. 69	24 Mar 1966	24 Mar 1966	—
1970 No. 167	30 Oct 1970	30 Oct 1970	—
1974 No. 155	12 Sept 1974	12 Sept 1974	—
1977 No. 63	27 May 1977	27 May 1977	—
1977 No. 86	15 June 1977	R. 1 (1): 18 Oct 1974 Remainder: 15 June 1977	—
1977 No. 87	15 June 1977	15 June 1977	—
1977 No.196	3 Nov 1977	3 Nov 1977	—
1978 No. 160	29 Aug 1978	29 Aug 1978	—
1982 No. 206	31 Aug 1982	31 Aug 1982	—
1984 No. 168	31 July 1984	1 Aug 1984	—
1986 No. 303	21 Oct 1986	R. 3 (1): 30 July 1985 R. 3 (3): 16 July 1985 R. 3 (5): 9 Oct 1985 R. 3 (7): 27 Aug 1984 R. 3 (9): 2 Dec 1985 Remainder: 21 Oct 1986	—
1986 No. 392	12 Jan 1987	12 Jan 1987	—
1987 No. 52	3 Apr 1987	3 Apr 1987	—
1988 No. 233	30 Sept 1988	30 Sept 1988	—

(a) Part II of the Banking Act 1959 came into operation on the day on which the Reserve Bank Act 1959 came into operation.

The Reserve Bank Act 1959 came into operation on 14 January 1960 (see Gazette 1960, p. 47).

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed rs. = repealed and substituted
Provision affected	How affected
R. 4.................	am. 1982 No. 206; 1986 No. 392
R. 5.................	am. 1962 No. 5; 1963 No. 80; 1966 No. 69; 1970 No. 167; 1974 No. 155; 1977 Nos. 63, 86, 87 and 196; 1978 No. 160; 1982 No. 206; 1984 No.168; 1986 No. 303; 1987 No. 52; 1988 No. 233
R. 6.................	am. 1977 No. 196
	rs. 1982 No. 206
	am. 1986 No. 392
R. 6A................	ad. 1982 No. 206
	rep. 1984 No. 168
R. 7.................	am. 1966 No. 69; 1977 No. 196; 1982 No. 206
	rs. 1984 No. 168
R. 8.................	am. 1966 No. 69; 1977 No. 196
Schedule.............	ad. 1977 No. 87
	am. 1982 No. 206; 1986 No. 303

Overview

The Banking (Savings Bank) Regulations, Statutory Rules 1960 No. 6, were enacted to provide detailed rules for the operation of savings banks under the Banking Act 1959. These regulations address the specific requirements for deposits, investments, and permissible activities of savings banks in Australia. They were introduced to ensure that savings banks operate in a manner that safeguards depositors' interests and maintains the stability of the banking system. The regulations are made under the authority of the Commonwealth Parliament and their policy objective is to provide a framework for the prudential management of savings banks, ensuring they maintain adequate liquidity and invest in safe assets. These regulations came into effect concurrently with the commencement of Part II of the Banking Act 1959, which was on 14 January 1960. The regulations have been subject to several amendments over the years to adapt to changing financial conditions and regulatory requirements. The current compilation, prepared on 10 July 2002, incorporates all amendments up to Statutory Rules 1988 No. 233. The Office of Legislative Drafting, part of the Attorney-General’s Department, prepared this compilation to ensure that the regulations are up-to-date and accurately reflect the legislative intent.

Scope and Application

The Banking (Savings Bank) Regulations 1960, as amended, provide detailed rules and guidelines for the operation of savings banks in Australia under the Banking Act 1959. These regulations apply to savings banks and other financial institutions engaged in banking activities within Australia. The scope of these regulations includes the management of deposits, permissible investments, and the maintenance of adequate financial reserves. Notably, the regulations specify the types of investments that savings banks must hold, ensuring a level of financial stability and liquidity. They also set limits on the deposits savings banks can hold with trading banks and establish the permissible sources of deposits. Furthermore, these regulations have a national reach, applying across Australia and extending their reach through subordinate instruments that may further refine or expand upon the primary regulations. However, certain savings banks, such as The Hobart Savings Bank and the Launceston Bank for Savings, are exempt from specific investment and deposit requirements under these regulations. Contravention of these regulations is subject to penalties, including fines for non-compliance or failure to adhere to the stipulated provisions.

Key Provisions

The Banking (Savings Bank) Regulations, made under the Banking Act 1959, establish several key provisions governing savings banks in Australia. Section 3 provides that moneys shown in the books of a savings bank as owing by a trading bank to that savings bank shall be deemed to be money on deposit in Australia with that trading bank. This means that the banking transactions between savings banks and trading banks are considered deposits for the purposes of these regulations. Section 4 allows a savings bank to deposit money with or lend money to another savings bank if they are wholly owned subsidiaries of each other, or to any other bank that is not a savings bank. This section facilitates inter-bank transactions while maintaining some limitations. The obligations imposed on savings banks by these regulations are detailed in Sections 5 and 6. Section 5 mandates that savings banks must maintain a certain level of investments to ensure financial stability. These investments must include deposits with the Reserve Bank, loans to prescribed banks, Treasury Notes, Commonwealth and State securities, bills of exchange, promissory notes, debentures, stock, bonds, loans guaranteed by the Commonwealth, States, or Territories, housing and other loans secured by land in Australia, and secured loans to authorised dealers in the short-term money market. Savings banks are also permitted to invest up to 40% of their required investments in other eligible investments, excluding land, buildings, furniture, or equipment. Furthermore, Section 5 imposes a limit on the amount of deposits that a savings bank can have with trading banks, which must not exceed $4,000,000 or 2.5% of the total deposits, whichever is higher. These restrictions are not applicable to The Hobart Savings Bank or the Launceston Bank for Savings. Section 6 prohibits savings banks from accepting deposits from other savings banks, except in the case of wholly owned subsidiaries. This restriction is designed to prevent conflicts of interest and ensure that savings banks maintain their financial integrity. Section 7 allows a person authorised to operate on an account maintained with a savings bank to draw cheques on that account, providing flexibility for account holders to access their funds as needed. The regulations also establish penalties for non-compliance. Section 8 states that savings banks found guilty of contravening or failing to comply with any provision of these regulations are subject to penalties. For a single offence, the penalty is a fine not exceeding $2,000, and for a continuing offence, the penalty is a fine not exceeding $2,000 for each day the offence continues. These penalties serve as a deterrent against non-compliance and help ensure that savings banks adhere to the regulatory framework established by these regulations.

Area of Law: Finance & Banking Law
Instrument: Regulation
Concepts: Definitions & Interpretation; Commencement Provisions; Penalties; Licensing & Registration; Compliance Obligations; Enforcement Powers

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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