Revocation of authority to carry on banking business 2024 – Lithuanian Co-operative Credit Society ‘Talka’ Limited

Overview

The Revocation of Authority to Carry on Banking Business 2024, enacted under the Banking Act 1959, addresses the formal process for revoking the banking authority of a foreign financial institution operating in Australia. Specifically, this legislative instrument revokes the section 9 authority of the Lithuanian Co-operative Credit Society ‘Talka’ Limited, which requested the revocation of its authority to conduct banking business in Australia. This revocation was authorised by Renée Roberts, a delegate of the Australian Prudential Regulation Authority (APRA), following a written request from the institution and after ensuring that the revocation would not negatively impact the national interest or depositors. The instrument aims to ensure that APRA maintains oversight and control over the banking sector, thereby protecting the interests of consumers and maintaining the stability of the financial system. This instrument took effect on the date it was issued, 27 May 2024.

Scope and Application

The Revocation of Authority to Carry on Banking Business 2024 (No. 2) instrument pertains specifically to the Lithuanian Co-operative Credit Society ‘Talka’ Limited, an entity with Australian Business Number 97 087 651 554, and revokes its authority under section 9 of the Banking Act 1959 to conduct banking business in Australia. This revocation follows the entity's written request to the Australian Prudential Regulation Authority (APRA) and is executed by Renée Roberts, a delegate of APRA, under subsection 9A(1) of the Banking Act 1959. The revocation is effective from the date the instrument is made, and APRA is mandated to publish the notice of this revocation in the Gazette, with the possibility of further dissemination through other means as deemed appropriate. The revocation is premised on the delegate's satisfaction that such action would not undermine the national interest or the interests of the entity's depositors. The scope of the instrument is confined to the particular entity and its cessation of banking operations within Australia, without extension to other entities or industries, and does not specify exclusions, exemptions, or thresholds beyond the statutory requirements of the Banking Act 1959.

Key Provisions

The key operative sections of this instrument are sections 9 and 9A of the Banking Act 1959, which pertain to the revocation of the authority to carry on banking business. Section 9 outlines what constitutes 'banking business' and the 'section 9 authority', while section 9A allows a delegate of APRA to revoke this authority under certain conditions. The revocation is triggered by a written request from the body corporate, Lithuanian Co-operative Credit Society ‘Talka’ Limited, to APRA. The authority is revoked by Renée Roberts, an Executive Director and delegate of APRA, upon being satisfied that the revocation does not contravene national or depositor interests. The Act imposes several obligations on the parties involved. Primarily, the body corporate must formally request the revocation of its banking authority by submitting a written notice to APRA. APRA, in turn, is obliged to review the request and determine whether the revocation is in the public interest and does not adversely affect depositors. If satisfied with the request and the implications of the revocation, APRA must proceed with the revocation, as per the authority granted under section 9A(1) of the Act. Additionally, APRA is required to publish a notice of the revocation in the Gazette and may choose to disseminate it through other means. In terms of the consequences for breach, the Act does not explicitly detail specific offences, penalties, or consequences for the failure to comply with the revocation process. However, the revocation itself signifies the termination of the body corporate's authority to operate as a bank in Australia. Any continued operation of banking activities without the requisite authority could potentially lead to legal actions, including fines or other civil or criminal penalties under other sections of the Banking Act 1959 or related legislation. The precise penalties would depend on the specific nature of any further illegal activities undertaken post-revocation.