Conditions on authority to carry on banking business
Banking Act 1959 (‘the Act’)
To: Xinja Bank Limited ABN 99 618 937 054 (‘body corporate’)
Since the body corporate holds an authority to carry on banking business in Australia that is subject to a condition (‘the authority’),
I, Renée Roberts, a delegate of APRA, under paragraph 9AA(1)(a) of the Act, impose on the authority the additional condition specified in the Schedule.
When this notice takes effect, the conditions which apply to the authority are those set out in the attached Schedule of consolidated conditions.
This instrument takes effect on the date it is made. Dated: 16 February 2021
[Signed]
Renée Roberts1 Executive Director Policy & Advice
Interpretation
APRA means the Australian Prudential Regulation Authority.
banking business has the meaning given in subsection 5(1) of the Act.
1 A delegate of APRA.
Schedule – the additional condition imposed on the authority
1. Xinja must not recommence carrying on banking business in Australia, but is permitted to undertake activities to enable the revocation of its section 9 authority.
Schedule – the consolidated conditions
- Xinja must not change the terms of its existing shareholder or subscription agreements, or enter into any new shareholder or subscription agreements with existing shareholders, subscribers or their associates, without APRA’s consent
2. Xinja must not recommence carrying on banking business in Australia, but is permitted to undertake activities to enable the revocation of its section 9 authority.
A decision to impose conditions, or to vary or revoke conditions on the authority is a decision to which Part VI of the Act applies. You may request APRA reconsider the decision in accordance with subsection 51B(1) of the Act. The request for reconsideration must be made in writing, must set out the reasons for making the request, and must be given to APRA within 21 days after the day on which you first received notice of this decision, or within such further period as APRA allows. If you are dissatisfied with the outcome of APRA’s reconsideration of the decision, you may, subject to the Administrative Appeals Tribunal Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision.
APRA is required to publish this notice in the Gazette.
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Overview
The Banking Act 1959 was enacted to regulate the operations of banks and other financial institutions in Australia, ensuring stability and integrity within the financial system. This Act serves to address the need for stringent regulatory oversight of banking activities, providing a framework for the licensing and supervision of banks to protect consumers and maintain financial stability. The Act vests the Australian Prudential Regulation Authority (APRA) with the responsibility to regulate and supervise banks and other financial institutions. The policy objective of the Act is to safeguard the financial system by ensuring that banks and financial institutions are adequately capitalised, liquid, and managed prudently. This recent legislative instrument, issued by Renée Roberts, a delegate of APRA, imposes an additional condition on Xinja Bank Limited's authority to carry on banking business in Australia. The condition prohibits the bank from recommencing banking operations in Australia but allows it to undertake activities necessary for the revocation of its banking authority. This measure ensures that the bank adheres to the regulatory framework designed to protect consumers and maintain financial stability.
Scope and Application
The Banking Act 1959, under the authority delegated to Renée Roberts by the Australian Prudential Regulation Authority (APRA), imposes additional conditions on the authority held by Xinja Bank Limited to carry on banking business in Australia. This authority is subject to the condition that Xinja Bank Limited must not recommence carrying on banking business in Australia, although it is permitted to undertake activities to enable the revocation of its section 9 authority. The Act applies to Xinja Bank Limited, a body corporate identified by its Australian Business Number (ABN), and encompasses the conditions specified in the attached Schedule of consolidated conditions. These conditions further restrict Xinja Bank Limited's ability to alter existing shareholder or subscription agreements or enter into new agreements without APRA's consent. The decision to impose these conditions is subject to Part VI of the Banking Act 1959, allowing for reconsideration by APRA and potential review by the Administrative Appeals Tribunal. The notice is required to be published in the Gazette as mandated by the Act.
Key Provisions
The Banking Act 1959 governs the conditions under which Xinja Bank Limited can operate its banking business in Australia. Under section 9AA(1)(a), a delegate of the Australian Prudential Regulation Authority (APRA), Renée Roberts, has imposed an additional condition on Xinja Bank Limited's authority to carry on banking business. This condition, outlined in the Schedule, mandates that Xinja must not recommence carrying on banking business in Australia but is allowed to undertake activities to enable the revocation of its section 9 authority. Furthermore, the consolidated conditions require Xinja to obtain APRA's consent before changing existing shareholder or subscription agreements or entering into new ones with existing shareholders, subscribers, or their associates.
The obligations imposed by the Act and the conditions require Xinja Bank Limited to strictly adhere to the stipulated activities, particularly refraining from recommencing its banking operations in Australia without specific permission from APRA. Additionally, Xinja must ensure that any modifications to its shareholder or subscription agreements, or the creation of new ones with current shareholders, subscribers, or their associates, are approved by APRA. These requirements are designed to maintain regulatory oversight and ensure stability within the banking sector.
Failure to comply with the conditions set out by APRA may result in severe consequences. Under the Banking Act 1959, any breach of the imposed conditions could lead to the revocation of Xinja Bank Limited's authority to operate as a bank in Australia. The Act also allows for administrative and legal actions, including potential penalties and sanctions. For instance, the Act may provide for civil penalties for non-compliance, although specific penalties are not detailed in the provided text. Criminal penalties could also apply if the breach is found to be wilful or involves fraud, with potential maximum penalties including substantial fines and imprisonment for individuals responsible for the breach. These measures are in place to enforce compliance and uphold the integrity of the banking system.