New Zealand banks face new DTA Governance and Risk Standards
The Reserve Bank of New Zealand (RBNZ) has opened a consultation on the second tranche of its Deposit Takers Act (DTA) Standards. These standards cover governance, risk management, disclosure, business transfers, and reporting, with feedback due by May 15, 2026.
Five pillars for deposit taker oversight
RBNZ Director Prudential Policy, Jess Rowe, highlighted the consultation as a crucial step towards implementing the Deposit Takers Act (DTA).
She emphasized that technical feedback is essential to modernize and integrate the prudential framework effectively, ensuring a proportionate approach that fosters a competitive financial system.
This second tranche, open until May 15, 2026, focuses on five key exposure drafts and associated guidance.
These include the Governance Standard, the Risk Management Standard, the Disclosure Statements Standard, the Business Transfers, Holding Entity, and Restricted Activities Standard, and the Reporting Standard.
These standards aim to strengthen the regulatory framework for deposit takers, enhancing stability and public confidence in the financial sector.
The RBNZ is committed to ongoing engagement with both industry stakeholders and the public to refine these critical components.
Phased rollout and due diligence
This consultation is the second of three tranches for the DTA Standards, with the first published in October 2025. The third tranche is expected in June 2026, and all standards will be effective by December 1, 2028. The RBNZ is also consulting on Due Diligence Guidance, which clarifies directors' responsibilities for ensuring prudential compliance.
This comprehensive approach aims to provide clarity and sufficient lead time for the financial sector to adapt to the new regulatory environment.
Modernization with a long runway
The DTA Standards represent a necessary modernization of New Zealand's prudential framework, aligning it with international best practices.
While the phased consultation and extended implementation timeline offer ample preparation time for institutions, the ultimate success hinges on robust industry engagement to ensure proportionality.
This comprehensive overhaul is crucial for reinforcing financial stability and maintaining public trust in the evolving deposit taker landscape.