Overview

The Banking Act 1959, enacted by the Commonwealth Parliament, was established to regulate the banking industry and ensure financial stability. The Act provides a framework for the supervision and regulation of authorised deposit-taking institutions (ADIs) and sets out the requirements for their operations. The Act was introduced to address the need for a comprehensive legal framework to oversee banking activities and protect the interests of depositors and the national economy. In the context of revocation of a banking authority, the policy objective is to ensure that the revocation does not adversely affect the national interest or the interests of depositors, and that the process is transparent and conducted in accordance with the provisions of the Act. This legislative instrument revokes the authority of Select Credit Union Limited to carry on banking business in Australia, following an application by the institution and a determination by a delegate of the Australian Prudential Regulation Authority (APRA) that the revocation is in the best interest of depositors and the national interest.

Scope and Application

The Banking Act 1959 governs the revocation of an authorised deposit-taking institution's (ADI) authority to carry on banking business in Australia. This Act applies to entities such as Select Credit Union Limited that have previously been granted a banking licence by the Australian Prudential Regulation Authority (APRA). The revocation of such authority is applicable nationally and is exercised through a written application by the ADI to APRA, which must consider whether the revocation is in the national interest and would not adversely affect depositors. APRA may delegate this authority to an individual, as evidenced by the revocation notice signed by Keith Chapman, who acts on behalf of APRA. The revocation may be subject to specific conditions or periods as outlined in the Act, ensuring the continuity of certain legal obligations or provisions during the transition. The Act also includes provisions for publishing the revocation notice in the Gazette and other appropriate media to ensure transparency and compliance with the law. The Act's jurisdiction extends to ensuring that no entity other than the Reserve Bank or a licensed ADI carries on banking business without proper authorisation, with significant penalties for non-compliance.

Key Provisions

The main operative section of the Gazette is the revocation of the authority for Select Credit Union Limited, an authorised deposit-taking institution (ADI), to carry on banking business in Australia. This revocation, under subsection 9A(1) of the Banking Act 1959 (the Act), takes effect on 7 January 2016. The decision to revoke the authority was made by Keith Chapman, a delegate of the Australian Prudential Regulation Authority (APRA), who was satisfied that such a revocation would not be contrary to the national interest or the interests of the depositors of the ADI. This decision is formalised in a Notice, dated 7 July 2016, which includes specific details and interpretations relevant to the revocation process. The Act imposes several obligations and requirements on the parties it governs. Firstly, it mandates that APRA, upon receiving an application to revoke the authority to carry on banking business, must consider whether such revocation would be contrary to the national interest or the interests of the depositors. If satisfied that it is not, APRA is required to revoke the authority. Furthermore, under subsection 9A(6) of the Act, APRA is obligated to publish a copy of the Notice in the Gazette and may also publish notice of the revocation in any other manner it deems appropriate. This ensures transparency and informs the public of the changes in the banking regulatory landscape. The Banking Act 1959 also delineates specific offences and penalties for non-compliance. Under subsection 8(1) of the Act, a body corporate is guilty of an offence if it carries on banking business in Australia without the requisite authority, unless exempted by an order under section 11 of the Act. The penalty for such an offence is 200 penalty units, with an additional penalty under subsection 4B(3) of the Crimes Act 1914, which can amount to a maximum of 1,000 penalty units for a body corporate. This offence is classified as an indictable offence, meaning it can be prosecuted in a higher court. Moreover, if the offence continues over multiple days, the body corporate is liable for each day the offence persists, including the day of conviction or any later day.