Commonwealth Banks Amendment Act 1993

Administered by Department of the Treasury

Legislation au C2004A04601 In force Act

Legislation content

Commonwealth Banks
Amendment Act 1993

No. 46 of 1993

 

An Act to amend the Commonwealth Banks Act 1959, and
for related purposes

[Assented to 22 October 1993]

The Parliament of Australia enacts:

PART 1—PRELIMINARY

Short title etc.

1.(1) This Act may be cited as the Commonwealth Banks Amendment Act 1993.

(2) In this Act, “Principal Act” means the Commonwealth Banks Act 19591.

Commencement

2. This Act commences on the day on which it receives the Royal Assent.


PART 2—REDUCTION OF SHAREHOLDING OF
COMMONWEALTH GOVERNMENT FROM 70% TO 50.1%

Object of Part

3. The object of this Part is to allow the Commonwealth Government to reduce its shareholding in the Commonwealth Bank from 70% to 50.1%.

Commonwealth to retain ownership and control of the Commonwealth Bank

4. Section 27L of the Principal Act is amended by:

(a) by adding at the end of subsection (1) “if the transfer results in a breach of subsection (2)”;

(b) by omitting from paragraphs (2)(a) and (b) “70%” and substituting “50.1%”.

Transitional—exemption from stamp duty etc.—transfers by the Commonwealth of its shares in the Commonwealth Bank

5.(1) In this section:

“exempt matter” means:

(a) the transfer by the Commonwealth of any of its shares in the Commonwealth Bank, if the transfer is authorised by the amendments made by this Part; or

(b) an agreement relating to such a transfer; or

(c) the receipt of money by the Commonwealth, or by a person acting on behalf of the Commonwealth, in respect of such a transfer.

(2) Stamp duty or other tax is not payable under a law of a State or Territory in respect of:

(a) an exempt matter; or

(b) anything done (including a transaction entered into or an instrument or document made, executed, lodged or given) because of, or for a purpose connected with or arising out of, an exempt matter.

PART 3—AMENDMENT OF THE CHARTER OF THE
COMMONWEALTH DEVELOPMENT BANK

Object of Part

6. The object of this Part is to broaden the charter of the Commonwealth Development Bank by enabling it to provide finance in cases where some, but not all, of the finance would otherwise be available from other sources.

Functions of Development Bank

7. Section 72 of the Principal Act is amended by omitting from paragraph (a) all the words after “the opinion of the” and substituting the following words and subparagraphs:


“Development Bank:

(i) the provision of finance is desirable; and (ii) either:

(A) no part of the finance would otherwise be available on reasonable and suitable terms and conditions; or

(B) some, but not all, of the finance would otherwise be available on reasonable and suitable terms and conditions;”.

PART 4—AMENDMENTS RELATING TO A CAPITAL
INJECTION TO THE COMMONWEALTH DEVELOPMENT
BANK

Object of Part

8. The object of this Part is to allow the Commonwealth Government to make a capital injection to the Commonwealth Development Bank.

Share capital

9. Section 74A of the Principal Act is amended:

(a) by inserting after subsection (10) the following subsection:

“(10A) The Treasurer may direct the Development Bank to issue to the Commonwealth a specified number of shares in the capital in the Development Bank. If the Treasurer so directs and the Commonwealth pays to the Development Bank, as subscription money in respect of the shares, an amount agreed between the Treasurer and the Board:

(a) the shares are taken to have been issued by the Development Bank to the Commonwealth; and

(b) the Commonwealth holds the shares as legal and beneficial owner.”;

(b) by inserting in subsection (12) “or the Commonwealth” after “Commonwealth Bank”.

Profits of Development Bank

10. Section 77A of the Principal Act is amended:

(a) by omitting from paragraph (1)(a) “the Commonwealth Bank” and substituting “a shareholder in the Development Bank”;

(b) by adding at the end the following subsection:

“(3)  In exercising its powers under this section in relation to the payment of dividends, the Board must ensure that the ratio of dividends paid to nominal value of shares held is the same for each shareholder in the Development Bank.”.


PART 5—AMENDMENT RELATING TO THE SUBSIDISATION
OF THE COMMONWEALTH DEVELOPMENT BANK BY THE
COMMONWEALTH GOVERNMENT

Object of Part

11. The object of this Part is to authorise the making of grants of financial assistance to the Commonwealth Development Bank by the Commonwealth Government.

Insertion of new section

12. After section 85 of the Principal Act the following section is inserted:

Grant of financial assistance by Treasurer

“85A.(1) The Treasurer may, by writing, determine that the Development Bank is entitled to be paid a specified amount by the Commonwealth by way of a grant of financial assistance.

“(2) The grant may be unconditional or subject to such terms and conditions as are specified in the determination.

“(3) The Treasurer must not make a determination under this section unless the Treasurer and the Board agree about:

(a) the amount of the grant; and

(b) the terms and conditions (if any) to which the grant is subject.

“(4) A grant under this section is to be made out of money appropriated by the Parliament for the purpose.”.

PART 6—AMENDMENTS RELATING TO SHARES IN THE
COMMONWEALTH BANK HELD BY DEPOSITARIES UNDER
AMERICAN DEPOSITARY RECEIPTS SCHEMES

Object of Part

13. The object of this Part is to allow shares in the Commonwealth Bank to be held by a banking entity that is a depositary under an American Depositary Receipts scheme.

Limitation of shareholdings in Commonwealth Bank

14. Section 10A of the Banks (Shareholdings) Act 1972 is amended:

(a) by inserting after subsection (2) the following subsection:

“(2A) Subject to the regulations, the reference in subsection (1) to an interest in a voting share does not include a reference to an interest that a banking entity has only because the banking entity is a depositary under a scheme known as an American Depositary Receipts scheme.”;

(b) by adding at the end of paragraph (3)(b) “or (2A)”.


NOTE

1. No. 5, 1959, as amended. For previous amendments, see No. 75, 1961; No. 3, 1962; No. 57, 1963; No. 132, 1965; Nos. 58 and 93, 1966; No. 144, 1968; Nos. 117 and 216, 1973; No. 81, 1974; No. 37, 1976; Nos. 36 and 77, 1978; No. 177, 1980; No. 29, 1981; No. 92, 1983; Nos. 63 and 76, 1984; No. 210, 1991; and No. 193, 1992.

[Minister’s second reading speech made in—

House of Representatives on 18 August 1993

Senate on 27 September 1993]

Overview

The Commonwealth Banks Amendment Act 1993 was enacted by the Parliament of Australia to amend the Commonwealth Banks Act 1959 and address several financial and regulatory issues concerning the Commonwealth Bank and the Commonwealth Development Bank. The primary objectives of this Act include allowing the Commonwealth Government to reduce its shareholding in the Commonwealth Bank from 70% to 50.1%, exempting certain share transfers from stamp duty, broadening the charter of the Commonwealth Development Bank, enabling the Commonwealth Government to inject capital into the Commonwealth Development Bank, and authorising grants of financial assistance to the Commonwealth Development Bank. The Act aims to facilitate smoother financial transactions and enhance the operational flexibility of these entities by removing certain regulatory barriers and updating ownership structures.

Scope and Application

The Commonwealth Banks Amendment Act 1993 primarily focuses on altering the shareholding structure and operational framework of the Commonwealth Bank and the Commonwealth Development Bank. The Act applies to the Commonwealth Government, the Commonwealth Bank, and the Commonwealth Development Bank. It allows the Commonwealth Government to reduce its shareholding in the Commonwealth Bank from 70% to 50.1%, while ensuring that the government retains ownership and control. Additionally, the Act broadens the charter of the Commonwealth Development Bank, enabling it to provide finance in cases where some, but not all, of the finance would otherwise be available from other sources. It also facilitates the Commonwealth Government making a capital injection into the Commonwealth Development Bank and allows for the granting of financial assistance by the Commonwealth Government to the Commonwealth Development Bank. Exemptions are provided for stamp duty and other taxes in respect of transfers of shares by the Commonwealth in the Commonwealth Bank as authorised by the Act. The amendments extend to transactions and instruments executed or made due to these transfers. The Act applies on a national level across Australia and its territories.

Key Provisions

The Commonwealth Banks Amendment Act 1993 (Act) contains several key provisions that alter the Commonwealth Banks Act 1959 (Principal Act). Firstly, it allows the Commonwealth Government to reduce its shareholding in the Commonwealth Bank from 70% to 50.1%, as detailed in section 4. This change is formalised in the amendment of section 27L of the Principal Act. Furthermore, section 5 provides a transitional exemption from stamp duty or other taxes for transfers of shares in the Commonwealth Bank by the Commonwealth, as well as related agreements or receipt of money. The Act also imposes certain obligations on the Commonwealth Government and the Commonwealth Development Bank. Under section 7, the Commonwealth Development Bank is enabled to provide finance in cases where some, but not all, of the finance would otherwise be available from other sources. This amendment is achieved by modifying section 72 of the Principal Act. Section 9 of the Act further mandates that the Treasurer may direct the Development Bank to issue a specified number of shares to the Commonwealth, and that these shares are to be held as legal and beneficial owner by the Commonwealth. Additionally, section 10 requires the Board of the Development Bank to ensure that dividends paid to shareholders are proportional to the nominal value of their shares. The Act also outlines potential consequences for non-compliance. Breaches of the Act may result in civil or criminal penalties, although specific penalties are not detailed within the Act itself. The Act, however, does note that grants of financial assistance to the Commonwealth Development Bank must be made out of money appropriated by the Parliament for the purpose, as stated in section 12(4). Finally, the Act includes provisions for the holding of shares in the Commonwealth Bank by banking entities that are depositaries under an American Depositary Receipts scheme, as indicated in section 14. This amendment is made to section 10A of the Banks (Shareholdings) Act 1972, which is referenced in the Act to clarify the scope of shareholdings in the Commonwealth Bank. This provision is important for entities participating in the American Depositary Receipts scheme, as it exempts them from certain shareholding limitations.

Legal classification tags

Area of Law
Commercial Law
Corporate Law & Governance
Instrument
Act
Concepts
Commencement Provisions
Regulatory Standards
Licensing & Registration
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

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.