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Consent to sale or disposal of business of an authorised deposit-taking institution
Banking Act 1959
TO: Intech Credit Union Limited ABN 70 087 650 191 (the body corporate) SINCE
- the body corporate is an ADI for the purposes of the Banking Act 1959 (the Act); and
B. the body corporate proposes to enter into an arrangement or agreement for the sale or disposal of its business (by amalgamation or otherwise) to mecu Limited ABN 21 087 651 607, as described in the attached Schedule (the sale or disposal); and
C. I have taken into account the national interest.
I, Stephen Edward Glenfield, a delegate of the Treasurer, under subsection 63(1) of the Act, CONSENT to the sale or disposal.
Dated: 21 October 2016
[Signed]
Stephen Edward Glenfield General Manager
Specialised Institutions Division South West Region
Interpretation Document ID: 224812
In this Notice
APRA means the Australian Prudential Regulation Authority.
ADI is short for authorised deposit-taking institution and has the meaning given in subsection 5(1) of the Act.
foreign ADI has the meaning given in subsection 5(1) of the Act.
Note 1
By virtue of subsection 63(2) of the Act, any arrangement, agreement or reconstruction and any
such sale or disposal in pursuance of any such agreement or arrangement, entered into without the prior consent of the Treasurer is void and of no effect. Subsection 63(3) provides that the consent of the Treasurer shall not be unreasonably withheld.
Note 2
Under subsection 63(1AA) of the Act, the Treasurer must arrange for notice of this consent to be
published in the Gazette as soon as practicable.
Note 3
Under subsection 63(1) of the Act, an ADI, other than a foreign ADI, is guilty of an offence if the
ADI enters into an arrangement or agreement for the sale or disposal of its business or for carrying on business in partnership with another ADI, or effects a reconstruction of the ADI, without the Treasurer’s prior consent in writing. The maximum penalty is 200 penalty units.
Note 4
offence.
Note 5
Under subsection 63(1A) of the Act, an offence against subsection 63(1) of the Act is an indictable
Under paragraph 63(5)(a) of the Act, the Treasurer may, in writing, delegate all or any of his or her
powers under subsection 63 to APRA, an APRA member or an APRA staff member.
Schedule
An arrangement for the voluntary total transfer of business under the Financial Sector (Business Transfer and Group Restructure) Act 1999.
Overview
The Banking Act 1959 was enacted to regulate the operations of authorised deposit-taking institutions (ADIs) and to provide for their prudential supervision. It was introduced to address the need for a robust legal framework governing the banking sector, ensuring financial stability and protecting depositors. The Act vests significant powers in the Treasurer, including the authority to consent to the sale or disposal of a business by an ADI. This legislative framework aims to maintain confidence in the financial system and safeguard the interests of depositors and the broader economy. Parliament enacted the Banking Act 1959 to ensure that the banking sector operates within a regulated environment that prioritises financial stability and consumer protection. The policy objective is to provide clear guidelines and oversight mechanisms to prevent unauthorised transactions that could jeopardise the stability of the financial system.
Scope and Application
The Banking Act 1959 governs the consent required for the sale or disposal of the business of authorised deposit-taking institutions (ADIs) in Australia. This legislation applies to entities classified as ADIs, excluding foreign ADIs, that propose to enter into arrangements or agreements for the sale or disposal of their business, including through amalgamations. The Act mandates that any such transactions must receive prior written consent from the Treasurer of Australia, who may delegate this authority to the Australian Prudential Regulation Authority (APRA) or its members or staff. Failure to obtain the necessary consent renders the arrangement, agreement, or sale void and may result in an offence, with penalties of up to 200 penalty units for non-compliance. This Act extends across the Commonwealth of Australia, providing a regulatory framework to protect the national interest in the financial sector. The scope of the Act includes ensuring that the sale or disposal of an ADI's business aligns with the broader economic stability and public interest considerations.
Key Provisions
The Gazette notice (C2016G01412) issued under the Banking Act 1959 (the Act) provides consent for Intech Credit Union Limited to proceed with the sale or disposal of its business to mecu Limited. This consent is granted by Stephen Edward Glenfield, a delegate of the Treasurer, under subsection 63(1) of the Act, after considering the national interest. The sale or disposal involves the transfer of Intech Credit Union Limited's business by amalgamation or otherwise, as detailed in the attached Schedule (section 63(2)). The notice highlights that any sale or disposal agreement entered into without the Treasurer's prior consent is void and of no effect (section 63(3)). Furthermore, it mandates the publication of the consent in the Gazette as soon as practicable (subsection 63(1AA)).
The Banking Act 1959 imposes specific obligations on authorised deposit-taking institutions (ADIs) concerning the sale or disposal of their business. An ADI, excluding foreign ADIs, must obtain the Treasurer's prior written consent before entering into any arrangement or agreement for the sale or disposal of its business, or for carrying on business in partnership with another ADI, or effecting a reconstruction (subsection 63(1)). Failure to secure this consent constitutes an offence and may result in a maximum penalty of 200 penalty units (subsection 63(1)). Additionally, the Treasurer has the authority to delegate the power to grant such consent to the Australian Prudential Regulation Authority (APRA), its members, or staff (subsection 63(5)(a)).
The Banking Act 1959 sets out the potential consequences for breaches of its provisions. An ADI that enters into a sale or disposal agreement without the required consent commits an indictable offence (subsection 63(1A)). The maximum penalty for such an offence is 200 penalty units (subsection 63(1)). The Act also mandates that notice of the consent be published in the Gazette to ensure transparency and compliance with regulatory requirements (subsection 63(1AA)). This notice serves to inform the public and relevant stakeholders of the authorised sale or disposal of an ADI's business, thereby maintaining the integrity and stability of the financial sector.