Notice of revocation of consent to establish or maintain a representative office in Australia
Banking Act 1959
TO: Union Bank of India 17 135 448 047 (you)
Suite 9.02, Level 9, 20 Hunter Street, Sydney, New South Wales 2000
I, Keith Chapman, a delegate of APRA, under paragraph 67(2)(c) of the Banking Act 1959 (the Act), REVOKE the consent previously given by APRA to you on 12 January 2009 to establish or maintain an office in Australia in connection with the carrying on by you of banking business in a foreign country.
Dated 1 December 2015
[Signed]
Keith Chapman
Executive General Manager Specialised Institutions Division
Interpretation Document ID: 220105
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.
Note 1
Under subsection 67(1) of the Act, a person (other than an ADI) is guilty of an offence if the person:
(a) carries on banking business in a foreign country but does not carry on banking business in Australia; and
(b) establishes or maintains an office in Australia wholly or partly in connection with that banking business in that foreign country; and
(c) APRA has not consented, in writing, to the establishment or maintenance of that office; and
(d) there is no order in force under section 11 of the Act determining that subsection 67(1) does not apply to that person.
The maximum penalty is 50 penalty units or, in the case of a body corporate, subsection 4B(3) of the Crimes Act 1914 allows a court to impose a fine of up to 250 penalty units.
Note 2
Under subsection 67(2) of the Act, APRA may at any time impose conditions, or additional
conditions, on a consent or vary or revoke conditions imposed on a consent or revoke a consent.
Note 3
Under subsection 67(1A) of the Act, if a person commits an offence against subsection 67(1), the
person is guilty of an offence against that subsection in respect of the first day on which the offence is committed and each subsequent day (if any) on which the circumstances that gave rise to the person committing the offence continue (including the day of conviction for any such offence or any later day).
Note 4
Under subsection 67(5) of the Act, a decision to make this revocation is a decision to which Part VI
of the Act applies. If a person whose interests are affected is dissatisfied with that decision, the person may seek reconsideration of the decision by APRA in accordance with section 51B(1) of the Act. The request for reconsideration must be in writing, must state the reasons for the request, and must be given to APRA within 21 days after the decision first comes to the person’s notice or within such further period as APRA allows. If dissatisfied with APRA’s reconsidered decision confirming or varying the first decision, the person may, subject to the Administrative Appeals Act 1975, apply to the Administrative Appeals Tribunal for review of the reconsidered decision.
The address where written notice may be given to APRA is Level 26, 400 George Street, Sydney NSW 2000.
Overview
The Banking Act 1959 was enacted to regulate the banking industry in Australia, providing a comprehensive framework for the operation of banks and other financial institutions. One of the critical provisions of this Act is the regulation of foreign banks operating in Australia. The problem this Act was introduced to address is the need to control and monitor foreign banking activities to ensure they do not disrupt the domestic financial system. This is achieved through provisions that require non-authorised deposit-taking institutions to obtain consent from the Australian Prudential Regulation Authority (APRA) before establishing or maintaining offices in Australia in connection with their foreign banking business. The enacting body of this legislation is the Parliament of Australia, with the policy objective of maintaining financial stability and protecting consumers by ensuring that foreign banks adhere to Australian regulations when operating within the country.
The document in question is a notice issued by Keith Chapman, a delegate of APRA, revoking the consent previously granted to Union Bank of India to establish or maintain an office in Australia for conducting banking business in a foreign country. This revocation is in accordance with the provisions of the Banking Act 1959, specifically under paragraph 67(2)(c), which empowers APRA to impose conditions on, vary, or revoke consents. The revocation is a decision subject to reconsideration by APRA and, if necessary, review by the Administrative Appeals Tribunal. The notice serves to underscore the importance of compliance with Australian regulations by foreign banks and the enforcement mechanisms available to APRA to ensure such compliance.
Scope and Application
The Banking Act 1959 applies to any person or entity seeking to establish or maintain an office in Australia in connection with the carrying on of banking business in a foreign country, provided they are not an authorised deposit-taking institution (ADI). The Act operates within the Commonwealth jurisdiction and mandates that such persons or entities must obtain written consent from the Australian Prudential Regulation Authority (APRA) before establishing or maintaining such an office. The revocation of consent, as exemplified in the notice to Union Bank of India, signifies that APRA no longer approves the maintenance of the office in Australia for the specified banking activities. This revocation could result in an offence under the Act if the entity continues to maintain the office without consent or an applicable order. The Act provides for penalties, including fines of up to 50 penalty units for individuals and up to 250 penalty units for body corporates, and allows for reconsideration or review of APRA's decisions through the Administrative Appeals Tribunal. The Act also enables APRA to impose, vary, or revoke conditions associated with consent, ensuring compliance with its regulatory framework.
Key Provisions
The primary operative sections of the Banking Act 1959 (the Act) in this Notice of revocation relate to the conditions and powers under which the Australian Prudential Regulation Authority (APRA) can grant or revoke consent for a foreign banking entity to establish or maintain an office in Australia. Section 67(1) prohibits a person who is not an authorised deposit-taking institution (ADI) from conducting banking business in a foreign country while establishing or maintaining an office in Australia without APRA’s written consent, or without an applicable order under section 11 of the Act. This revocation of consent (sections 67(2) and 67(2)(c)) specifically addresses the Union Bank of India, whose consent to establish or maintain an office in Australia was initially granted on 12 January 2009 but is now revoked as of 1 December 2015.
The Act imposes several obligations on foreign banking entities, such as Union Bank of India, seeking to conduct banking business in Australia. These include obtaining APRA’s written consent to establish or maintain an office in Australia and adhering to any conditions imposed by APRA. Additionally, the entity must not carry on banking business in Australia without consent or an applicable order under section 11 of the Act. Failure to comply with these provisions can result in serious consequences, as outlined in the Act.
Under the Banking Act 1959, any person who contravenes the provisions by carrying on banking business in a foreign country and establishing or maintaining an office in Australia without APRA’s consent commits an offence. The maximum penalty for such an offence is 50 penalty units, or 250 penalty units for a body corporate, as specified under subsection 4B(3) of the Crimes Act 1914. Additionally, the offence can be compounded daily if the contravention continues. Should Union Bank of India or any affected party disagree with APRA’s decision to revoke consent, they have the right to seek reconsideration within 21 days of the decision being communicated or within any extended period allowed by APRA. If still dissatisfied with the reconsidered decision, they may apply to the Administrative Appeals Tribunal for further review.
In summary, the Act clearly outlines the legal framework governing foreign banks' operations in Australia, including the strict requirements for APRA’s consent, the potential criminal and civil penalties for non-compliance, and the avenues available for reconsideration or appeal against APRA’s decisions. The Notice of revocation serves as a formal communication to Union Bank of India that their previously granted consent is no longer in effect, underscoring the importance of strict adherence to the Act’s provisions.