All licensed deposit takers can use 'bank' under DTA

The decision follows the RBNZ's 2025 public consultation on the use of the word 'bank' under the DTA.

Currently, the words 'bank', 'banker', and 'banking' are restricted under the Banking (Prudential Supervision) Act 1989 (BPSA) to help the public identify prudentially regulated entities.

When the DTA comes into full effect on 1 December 2028, all licensed deposit takers, including entities currently licensed as non-bank deposit takers (NBDTs), will be able to use these restricted words.

Overseas banks without a physical presence in New Zealand can continue to use restricted words, as authorised under the DTA.

Acting Assistant Governor Financial Stability, Angus McGregor, stated: "We are satisfied that the DTA provides the necessary safeguards to extend the use of restricted words to all licensed deposit takers.

This change supports improvements in the competitive landscape and a consistent approach across deposit takers, which was largely supported in consultation feedback.

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The DTA introduces a Depositor Compensation Scheme and provides new supervision powers, alongside a framework for managing and resolving deposit takers in financial distress.

It also grants the RBNZ greater authority to monitor deposit taker stability and intervene if financial situations or business practices risk depositors' money or New Zealand's financial system.

Mr McGregor further explained that "The DTA provides for closer regulation of all deposit takers and gives us new powers to make sure entities able to call themselves banks are doing the right things to keep depositors' money safe.

" This comprehensive regulatory update aims to enhance the overall resilience and integrity of the financial sector by ensuring all entities using the 'bank' label meet stringent prudential standards.