Revocation of authority to carry on banking business 2022 – ABN AMRO Bank N.V.

Overview

The Revocation of authority to carry on banking business 2022 is an instrument under the Banking Act 1959, enacted by Therese McCarthy Hockey, an Executive Director of the Banking Division at the Australian Prudential Regulation Authority (APRA). The authority to carry on banking business held by ABN AMRO Bank N.V. has been revoked following a written request from the bank to APRA, and with the satisfaction that such revocation would not be contrary to the national interest or the interests of the bank's depositors. The revocation is effective from 31 May 2022, and APRA is required to publish notice of this revocation in the Gazette, with the option to also publish notice in other ways. The primary objective of this legislation is to formally revoke a banking authority in a manner consistent with the provisions of the Banking Act 1959, ensuring that all necessary steps are taken to protect the interests of depositors and the national interest.

Scope and Application

The Revocation of Authority to Carry on Banking Business 2022 (ABN AMRO Bank N.V.) instrument, issued under the Banking Act 1959, applies specifically to ABN AMRO Bank N.V., identified by its Australian Business Number 70 744 009 137. This instrument revokes the bank's section 9 authority to conduct banking business in Australia, following a written request from the bank to the Australian Prudential Regulation Authority (APRA). The revocation is effective from 31 May 2022, and was authorised by Therese McCarthy Hockey, an Executive Director of the Banking Division and a delegate of APRA, who was satisfied that the revocation would not be contrary to the national interest or the interests of the bank’s depositors. The Act mandates APRA to publish notice of this revocation in the Gazette, with the possibility of further publication through other means. The instrument strictly adheres to the definitions provided in the Banking Act 1959 for terms such as "banking business" and "section 9 authority".

Key Provisions

The primary operative section of this instrument (section 2) is the revocation of the section 9 authority of ABN AMRO Bank N.V. to carry on banking business in Australia. This revocation follows the bank's formal written request to the Australian Prudential Regulation Authority (APRA) (section 1(a)), and APRA's satisfaction that such revocation would not be contrary to the national interest or the interests of the bank's depositors (section 1(b)). The instrument is signed by Therese McCarthy Hockey, an executive director of the Banking Division at APRA, and is dated 30 May 2022 (section 3). The instrument takes effect on 31 May 2022 (section 4). Under the Banking Act 1959, the revocation of a bank's section 9 authority is contingent upon the bank's formal written request to APRA and APRA's subsequent assessment that the revocation would not adversely affect the national interest or depositors (section 1). APRA must then publish notice of the revocation in the Gazette and may choose to publish it in other ways (section 5). The obligations of ABN AMRO Bank N.V. and APRA are thus clearly defined within the Act, with ABN AMRO Bank N.V. required to formally request the revocation of its authority, and APRA required to assess the request and publish the revocation notice. Breaches of the provisions outlined in this instrument may result in civil or criminal consequences, depending on the nature of the breach. Under the Banking Act 1959, a person who contravenes a provision of the Act may be subject to a civil penalty not exceeding the greater of three times the benefit obtained from the contravention, $2.7 million, or 10% of the person's annual turnover for the relevant year (subsection 13(1)). In addition, a person who is found guilty of an offence under the Act may be subject to a fine not exceeding the greater of 50,000 penalty units, three times the benefit obtained from the contravention, or 10% of the person's annual turnover for the relevant year (subsection 13(2)). The maximum penalties for contraventions of the Act are thus significant, underscoring the importance of compliance with the Act's provisions. In summary, the Revocation of authority to carry on banking business 2022 (ABN AMRO Bank N.V.) instrument revokes the section 9 authority of ABN AMRO Bank N.V. to carry on banking business in Australia, following the bank's formal request and APRA's assessment that the revocation would not adversely affect the national interest or depositors. The obligations of ABN AMRO Bank N.V. and APRA are clearly defined within the Banking Act 1959, and breaches of the Act's provisions may result in significant civil or criminal penalties. The instrument is an important step in ensuring that the interests of depositors and the national interest are protected, while also allowing ABN AMRO Bank N.V. to exit the Australian market in an orderly manner.