Deposit Takers Regulations 2025
2025/1
Deposit Takers Regulations 2025
Cindy Kiro, Governor-General
Order in Council
At Wellington this 28th day of January 2025
Present:
Her Excellency the Governor-General in Council
These regulations are made under sections 238, 454, and 455 of the Deposit Takers Act 2023—
(a)
on the advice and with the consent of the Executive Council; and
(b)
(c)
after the Reserve Bank has complied with sections 241, 242, 454(4), 455(3), and 460 of that Act.
Contents
Regulations
1 Title
These regulations are the Deposit Takers Regulations 2025.
2 Commencement
These regulations come into force on 1 July 2025.
3 Interpretation
In these regulations, unless the context otherwise requires,—
Act means the Deposit Takers Act 2023
captive cash PIE means a managed investment scheme (as defined in section 9 of the FMCA) that meets all of the following requirements:
(a)
it is a multi-rate PIE (as defined in section YA 1 of the Income Tax Act 2007); and
(b)
it is constituted (or to be constituted) as 1 or more trusts or as including 1 or more trusts (or both); and
(c)
it invests only in protected deposits issued by a single licensed deposit taker (A); and
(d)
A, or A’s associate,—
(i)
is the issuer of interests in the scheme; and
(ii)
in the ordinary course of its business, continuously offers interests in the scheme
financial year means the 12 months ending on the close of 30 June
levy year means the financial year to which the levy relates
registered bank means a registered bank under the Banking (Prudential Supervision) Act 1989
regular surveys means the regular surveys conducted by the Bank under section 99 of the Act, section 262 of the Reserve Bank of New Zealand Act 2021, section 93 of the Banking (Prudential Supervision) Act 1989, or section 50 of the Non-bank Deposit Takers Act 2013 in the ordinary course of carrying out its functions.
4 Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1 have effect according to their terms.
Part 1 Depositor compensation scheme
5 Requirements for definition of protected deposit
(1)
This regulation prescribes the requirements that a debt security must satisfy for the purposes of section 192(1)(c)(i) of the Act in order to be a protected deposit.
(2)
The requirements are as follows:
(a)
the debt security must be 1 or more of the following:
Current accounts and savings accounts
(i)
a call debt security:
(ii)
a call credit union share:
(iii)
a call building society share:
(iv)
a credit union savings account product:
Term deposit products
(v)
a fixed term deposit product:
(vi)
a fixed term redeemable building society share:
(vii)
a credit union fixed term deposit product:
Notice account products
(viii)
a bank notice product:
(ix)
a product that is substantially equivalent to a bank notice product, except that it is not issued by a registered bank:
Rights in connection with revolving credit contract
(x)
a right to be repaid, or paid interest on, a positive credit balance in connection with a revolving credit contract (for example, in connection with a revolving home loan or credit card contract); and
(b)
the debt security must not be—
(i)
quoted, or intended to be quoted, on a licensed market or listed, or intended to be listed, on some other established market; or
(ii)
subject to terms and conditions that expressly provide for the holder of the security to readily trade the security to another person; and
(c)
if, within the group of all debt securities issued by a licensed deposit taker that satisfy the definition of protected deposit in all other respects, the deposit taker assigns different priorities for repayment on liquidation, the debt security must be in the highest-ranking tranche within the group.
(3)
In this regulation,—
bank notice product, call building society share, call credit union share, call debt security, credit union fixed term deposit product, credit union savings account product, and fixed term redeemable building society share have the meanings given in regulation 5(1) of the Financial Markets Conduct Regulations 2014
fixed term deposit product means a debt security issued by a licensed deposit taker that has—
(a)
a fixed term; and
(b)
a fixed principal amount
licensed market has the meaning given in section 6(1) of the FMCA
revolving credit contract has the meaning given in section 5 of the Credit Contracts and Consumer Finance Act 2003.
6 Debt security issued by certain overseas licensed deposit takers is not protected deposit
(1)
This regulation applies for the purposes of section 192(2)(c) of the Act.
(2)
A debt security issued by an overseas licensed deposit taker that mainly provides services to wholesale clients is not a protected deposit.
(3)
In this regulation, wholesale client has the same meaning as in section 49(2) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
7 Prescribed relevant arrangements
(1)
For the purposes of section 191(2)(b) of the Act, the arrangements specified in the first column of the table in Schedule 2 are prescribed as relevant arrangements.
(2)
For the purposes of section 191(3)(b) of the Act, a protected deposit held under a relevant arrangement specified in the first column of the table in Schedule 2 must be treated as being held for, or on behalf of, the person specified in the second column opposite the arrangement.
8 Trusts excluded from section 209 entitlement rule for deposits held on trust
(1)
This regulation prescribes kinds of trusts to which section 209 does not apply for the purposes of section 209(1)(b)(ii) of the Act.
(2)
The following kinds of trust are prescribed:
(a)
a trust other than an express trust:
(b)
an express trust that is created other than—
(i)
by or under legislation; or
(ii)
under a trust deed or any other written document.
(3)
In this regulation, express trust has the meaning given in section 12 of the Trusts Act 2019.
Examples
Example 1
A constructive trust arises. That trust is not an express trust. The trust is of a kind prescribed under subclause (2)(a). The section 209 entitlement rule does not apply to the trust.
Example 2
The Brown Family Trust is created orally. It is not recorded in writing or created by legislation. That trust is of a kind prescribed under subclause (2)(b). The section 209 entitlement rule does not apply to the trust.
Example 3
The Smith Family Trust is an express trust created under a trust deed. That trust is not of a kind prescribed under this regulation. The section 209 entitlement rule applies to the trust.
9 Trustee’s entitlement in accordance with section 209 subject to conditions
(1)
This regulation applies to a person who under section 209(2) of the Act is to be treated as the person that holds the deposit (or for which, or on whose behalf, the deposit is held).
(2)
For the purposes of section 215 of the Act, the person’s entitlement to compensation is subject to the conditions set out in subclauses (3) and (4).
(3)
The person must provide to the Bank—
(a)
records to show that the protected deposit is held by or for, or on behalf of, 1 or more trustees under the trust; and
(b)
if the trust is created by or under legislation, the name of that legislation, or, in any other case, a copy of the trust deed or other written document that contains the terms of the trust; and
(c)
the name and contact details of each trustee of the trust.
(4)
The person must not unreasonably delay in providing the information specified in subclause (3) to the Bank.
10 Manner of maintaining records of shares in protected deposit held other than jointly
(1)
This regulation prescribes the manner in which records specifying a person’s share in a protected deposit must be maintained by the relevant person for the purposes of section 205(2)(a)(i) of the Act.
(2)
The records must—
(a)
be in writing; and
(b)
clearly specify each person’s share in the protected deposit by reference to—
(i)
the person’s name and, if known by the relevant person, the person’s date of birth; and
(ii)
the amount or percentage of the person’s share in the protected deposit; and
(c)
be maintained and dated before the quantification time.
(3)
If the records are provided to the Bank for the purposes of section 205(2)(a)(i) of the Act, the records must be accompanied by a statutory declaration made by the relevant person that the specified shares are true and correct and reflect the shares as at the quantification time.
(4)
However, subclause (3) does not apply if the relevant person is a person specified in the third column of the table in Schedule 2.
11 Manner of notifying shares in protected deposit held other than jointly
(1)
This regulation prescribes the manner in which the relevant person must notify of shares in a protected deposit for the purposes of section 205(2)(a)(ii) of the Act.
(2)
The notification must—
(a)
be made in writing to the Bank; and
(b)
clearly specify each person’s share in the protected deposit by reference to—
(i)
the person’s name and, if known by the relevant person, the person’s date of birth; and
(ii)
the amount or percentage of the person’s share in the protected deposit; and
(c)
be accompanied by a statutory declaration made by the relevant person that the specified shares are true and correct and reflect the shares as at the quantification time.
12 Meaning of relevant person in section 205 of Act
(1)
This regulation prescribes, for the purposes of section 205(5)(b) of the Act, the relevant person in the case of a deposit held under 1 or more relevant arrangements.
(2)
The relevant person for a relevant arrangement prescribed in these regulations is the person specified in the third column of the table in Schedule 2 opposite the description of the relevant arrangement and, if there is more than 1 person, is those persons acting together.
(3)
The relevant person for a relevant arrangement referred to in section 191(2)(a) of the Act is the provider of the regulated client money or property service.
13 Conditions not to unreasonably delay in providing certain information
(1)
For the purposes of section 215 of the Act, a person’s entitlement to compensation is subject to the conditions set out in subclauses (2) and (3).
(2)
The relevant person under section 205 of the Act must not unreasonably delay in providing records of shares or notifying of shares under section 205(2)(a).
(3)
The person to whom payment is to be made under section 219 of the Act (or the person authorised to act on their behalf) must not unreasonably delay in providing any information requested by the Bank that is necessary or desirable for the purpose of calculating or paying compensation.
14 Payment of entitlements when protected deposits held under relevant arrangement
(1)
This regulation prescribes the manner in which the Bank must pay compensation to, or on account of, the eligible depositor for the purposes of section 219(1)(a) of the Act.
(2)
If the deposit is held under a relevant arrangement, the Bank must pay compensation to the account holder on record with the licensed deposit taker on account of the eligible depositor.
(3)
However, in the case of a relevant arrangement that is a captive cash PIE, the Bank must pay compensation to the eligible depositor.
Part 2 Levy for depositor compensation scheme
15 Overview of this Part
This Part prescribes the levy payable by licensed deposit takers under section 235 of the Act.
16 Financial years to which levy applies
The levy applies to—
(a)
the financial year ending 30 June 2026; and
(b)
each subsequent financial year.
Guidance note
See section 235(2) of the Act for when the levy must be paid.
17 Calculation of levy
The levy payable by a licensed deposit taker for each levy year is calculated in accordance with the following formula:
levy base × levy rate
where—
- levy base
is the value in dollars of the deposit taker’s protected deposits for the levy year calculated in accordance with regulation 18
- levy rate
is the deposit taker’s levy rate for the levy year calculated in accordance with regulation 19.
18 Levy base
(1)
If a licensed deposit taker is a registered bank, the deposit taker’s levy base is calculated in accordance with the following formula:
(PD1 + (PD2 × 100,000)) × 0.7
where—
- PD1
is the total value in dollars of protected deposits issued by the deposit taker that have a value of less than or equal to $100,000, determined in accordance with subclause (4)
- PD2
is the total number of protected deposits issued by the deposit taker that have a value of more than $100,000, determined in accordance with subclause (4).
(2)
If a licensed deposit taker is a credit union, the deposit taker’s levy base is calculated in accordance with the following formula:
PDtotal × 0.8
- where PDtotal
is the total value in dollars of all protected deposits issued by the deposit taker, determined in accordance with subclause (4).
(3)
For any other licensed deposit taker, the deposit taker’s levy base is calculated in accordance with the following formula:
PDtotal × 0.4
- where PDtotal
is the total value in dollars of all protected deposits issued by the deposit taker, determined in accordance with subclause (4).
(4)
Total value or total number, as the case may be, is determined—
(a)
by taking the mean average of the values or numbers reported to the Bank by the licensed deposit taker in regular surveys during the levy year; or
(b)
if a licensed deposit taker has not participated in any regular surveys during the levy year, by using the value or number reported to the Bank by the deposit taker in accordance with a requirement under section 99 of the Act, section 262 of the Reserve Bank of New Zealand Act 2021, section 93 of the Banking (Prudential Supervision) Act 1989, or section 50 of the Non-bank Deposit Takers Act 2013.
19 Levy rate
(1)
A licensed deposit taker’s levy rate is the rate specified in the second column of the following table opposite the deposit taker’s risk category:
| Risk category | Levy rate | |
|---|---|---|
| Risk category 1 | 0.00053 | |
| Risk category 2 | 0.00088 | |
| Risk category 3 | 0.00123 | |
| Risk category 4 | 0.00158 |
(2)
A licensed deposit taker’s risk category is the category specified in the second column of the following table opposite the deposit taker’s risk score:
| Risk score (out of 100) | Risk category | |
|---|---|---|
| Less than or equal to 25 | Risk category 1 | |
| More than 25 and less than or equal to 40 | Risk category 2 | |
| More than 40 and less than or equal to 60 | Risk category 3 | |
| More than 60 | Risk category 4 |
(3)
However, if a licensed deposit taker has been a licensed deposit taker for less than 6 months before the start of the levy year,—
(a)
the deposit taker’s risk category is risk category 2 for that levy year; and
(b)
accordingly, no risk score applies to the deposit taker for that levy year.
(4)
A licensed deposit taker’s risk score is calculated in accordance with regulation 20.
20 Risk score
(1)
If a licensed deposit taker is a registered bank,—
(a)
the deposit taker’s risk score is the sum total of the values of the risk indicators specified in the first column of the table in subclause (2); and
(b)
the value of each risk indicator is calculated in accordance with regulation 21 using the inputs specified in the second to fifth columns of the table in subclause (2) opposite the relevant indicator.
(2)
The following table applies for the purposes of subclause (1):
| Risk indicator | Weighting (W) | Formula (x) | Lower boundary (A) | Upper boundary (B) | ||||
|---|---|---|---|---|---|---|---|---|
| Capital adequacy | 35 | (total capital ÷ risk-weighted assets) × 100 | 9 | 18 | ||||
| Liquidity (1-month mismatch ratio) | 15 | (1-month mismatch ÷ total funding) × 100 | 0 | 10 | ||||
| Liquidity (core funding ratio) | 20 | (1-year core funding ÷ loans and advances) × 100 | 75 | 100 | ||||
| Profitability | 15 | (profit after tax ÷ equity) × 100 | 1 | 10 | ||||
| Asset quality | 15 | (non-performing loans ÷ loans and advances) × 100 | 0 | 3 |
(3)
For any other licensed deposit taker,—
(a)
the deposit taker’s risk score is the sum total of the values of the risk indicators specified in the first column of the table in subclause (4); and
(b)
the value of each risk indicator is calculated in accordance with regulation 21 using the inputs specified in the second to fifth columns of the table in subclause (4) opposite the relevant indicator.
(4)
The following table applies for the purposes of subclause (3):
| Risk indicator | Weighting (W) | Formula (x) | Lower boundary (A) | Upper boundary (B) | ||||
|---|---|---|---|---|---|---|---|---|
| Capital adequacy | 40 | (net regulatory capital ÷ (risk-weighted assets + market risk)) × 100 | 8 | 18 | ||||
| Liquidity | 30 | (liquid assets ÷ total assets) × 100 | 10 | 35 | ||||
| Profitability | 15 | (net profit before tax ÷ net regulatory capital) × 100 | 1 | 10 | ||||
| Asset quality | 15 | (non-performing loans ÷ total gross loan book) × 100 | 0 | 3 |
(5)
The terms in the third column of the tables in subclauses (2) and (4) have the meanings set out in Schedule 3.
21 Risk indicators
(1)
The value of a risk indicator other than asset quality is calculated in accordance with the following formula:
((B − x) ÷ (B − A)) × W
where—
- A
is the lower boundary specified for the indicator in the fourth column of the relevant table in regulation 20
- B
is the upper boundary specified for the indicator in the fifth column of the relevant table in regulation 20
- x
is the mean average result of the formula specified for the indicator in the third column of the relevant table in regulation 20 determined in accordance with subclause (4)
- W
is the weighting specified for the indicator in the second column of the relevant table in regulation 20.
(2)
The value of the asset quality risk indicator is calculated in accordance with the following formula:
W − [((B − x) ÷ (B − A)) × W]
where—
- A
is the lower boundary specified for the indicator in the fourth column of the relevant table in regulation 20
- B
is the upper boundary specified for the indicator in the fifth column of the relevant table in regulation 20
- x
is the mean average result of the formula specified for the indicator in the third column of the relevant table in regulation 20 determined in accordance with subclause (4)
- W
is the weighting specified for the indicator in the second column of the relevant table in regulation 20.
(3)
However,—
(a)
if the value calculated under subclause (1) or (2) is less than 0, the value of the risk indicator is 0:
(b)
if the value calculated under subclause (1) or (2) is more than the value of the weighting specified for the indicator in the second column of the relevant table in regulation 20, the value of the risk indicator is the value of the weighting.
(4)
To determine the value of x, the Bank must—
(a)
calculate the formula specified for the indicator in the third column of the relevant table in regulation 20 for each instance that the licensed deposit taker reports the relevant data in regular surveys during the financial year preceding the levy year; and
(b)
use that data in the calculation with any adjustments to the data that are necessary to accurately determine the mean average across that financial year (for example, when regular survey data is reported on a year-to-date basis rather than since the last regular survey).
22 Deposit takers licensed for part of levy year
If a licensed deposit taker is a licensed deposit taker for only part of a levy year, the levy payable by the deposit taker for that year is a reduced amount calculated in accordance with the following formula:
a × (b ÷ 365)
where—
- a
is the full levy amount calculated in accordance with regulation 17 that would otherwise have been payable for the levy year
- b
is the number of days in the levy year that the deposit taker is a licensed deposit taker.
23 Interest on unpaid levy
(1)
The interest payable under section 237 of the Act is calculated for each day an amount on which interest is payable under section 237(2) of the Act remains unpaid in accordance with the following formula:
unpaid amount × (base rate ÷ 365)
where—
- unpaid amount
is the amount on which interest is payable under section 237(2) of the Act that remains unpaid at the close of the day
- base rate
is the official cash rate published on the Bank’s Internet site that applies on the day, plus 4%.
(2)
Interest is charged at the close of each month during which an amount remained unpaid for all or any part of the month.
24 Waivers and refunds of levy
(1)
The Bank may, on the application of a licensed deposit taker, waive or refund the whole or any part of the levy payable by the deposit taker if the Bank is satisfied that the exceptional circumstances or characteristics of the deposit taker would make it unduly onerous or burdensome for the deposit taker to pay the levy.
(2)
The application must be in writing and include information to satisfy the Bank of the test in subclause (1).
(3)
The Bank may waive the whole or any part of a levy if the amount of the levy is less than the reasonable cost of recovering it.
(4)
The Bank must refund any levy amount found to have been overpaid or paid in error to the appropriate person.
(5)
The Bank may give effect to a refund by reducing the deposit taker’s upcoming levy payment by the overpaid amount if the deposit taker agrees.
25 Bank may, on application, recalculate levy
(1)
The Bank may, on the application of a licensed deposit taker, recalculate the levy payable by the deposit taker if the Bank is satisfied that any data provided by the deposit taker and used in the levy calculation was incorrect.
(2)
The application must—
(a)
be made no later than 4 years after the end of the levy year; and
(b)
be in writing; and
(c)
include information to satisfy the Bank of the test in subclause (1).
(3)
If, on recalculation, the deposit taker has overpaid the levy, the Bank must refund the deposit taker the overpaid amount.
(4)
The Bank may give effect to the refund by reducing the deposit taker’s upcoming levy payment by the overpaid amount if the deposit taker agrees.
26 Levy exclusive of GST
The levy prescribed by these regulations is exclusive of any goods and services tax.
Schedule 1 Transitional, savings, and related provisions
Part 1 Provisions relating to these regulations as made
1 Regulation 5(2)(c) does not apply to existing debt securities issued by building societies
The requirement in regulation 5(2)(c) does not apply to a debt security issued by a building society before 1 July 2025, and the security is not to be taken into account for the purpose of assessing whether any other debt security meets the requirement in regulation 5(2)(c).
2 Transitional levy rate for certain licensed deposit takers
(1)
This clause applies during the transitional period to a licensed deposit taker that—
(a)
is 1 or more of the following:
(i)
a credit union:
(ii)
a building society:
(iii)
a registered charity; and
(b)
is not a registered bank.
(2)
If the licensed deposit taker is in risk category 2, 3, or 4, the deposit taker’s levy rate is 0.00055 (instead of the levy rate specified in regulation 19).
(3)
In this clause, transitional period has the meaning given in clause 2 of Schedule 1 of the Act.
Schedule 2 Prescribed relevant arrangements
| Relevant arrangement | Whom deposit is treated as being held for or on behalf of | Relevant person for purposes of section 205(5)(b) of Act | ||
|---|---|---|---|---|
| Deposit held in accordance with section 110 of the Lawyers and Conveyancers Act 2006 by a lawyer or conveyancing practitioner (or their related person or entity) or by an incorporated law or conveyancing firm | The person referred to in section 110 of the Lawyers and Conveyancers Act 2006 for whom, or on whose behalf, the money is received by the lawyer, conveyancing practitioner, or firm | The lawyer or conveyancing practitioner (or their related person or entity) or firm | ||
| Deposit held in a trust account for a client by a qualified statutory accountant (as defined in section 5(1) of the Financial Reporting Act 2013) in the course of providing accounting services or by an incorporated accounting firm | The client for whom the money is held | The qualified statutory accountant or firm | ||
| Deposit held in accordance with section 122 of the Real Estate Agents Act 2008 by a real estate agent (meaning an agent as defined in section 4(1) of the Real Estate Agents Act 2008) | The person referred to in section 122(1) of the Real Estate Agents Act 2008 who is lawfully entitled to that money | The real estate agent | ||
| Deposit held in accordance with section 29 of the Retirement Villages Act 2003 by a statutory supervisor of a retirement village | The resident referred to in section 29(1) of the Retirement Villages Act 2003 | The operator of the retirement village | ||
| Deposit held under a captive cash PIE | A person who holds interests in the scheme | The licensed deposit taker that issues the protected deposits |
Schedule 3 Definitions for calculating risk scores
1 Purpose of schedule
This schedule defines terms for the purposes of the formulas specified in the third columns of the tables in regulation 20(2) and (4).
2 Definitions for registered banks
In regulation 20(2),—
1-month mismatch means the deposit taker’s 1-month mismatch dollar amount calculated in accordance with BS13 Liquidity Policy issued by the Bank in July 2022
1-year core funding means the deposit taker’s 1-year core funding dollar amount calculated in accordance with BS13 Liquidity Policy issued by the Bank in July 2022
equity means the closing equity balance reported by the deposit taker in accordance with the Income Statement Survey version 1.5 issued by the Bank in 2023 and the Procedures & Definitions: Income Statement Survey issued by the Bank in February 2021
loans and advances means the loans and advances (net) reported by the deposit taker in accordance with the Bank Balance Sheet Survey version 1.6 issued by the Bank in 2023 and the Procedures & Definitions: Bank Balance Sheet Survey issued by the Bank in December 2021
non-performing loans means the sum of the deposit taker’s loans and advances (gross) that are 90-days-plus past due (not impaired) assets or impaired assets reported by the deposit taker in accordance with the Bank Balance Sheet Survey version 1.6 issued by the Bank in 2023 and the Procedures & Definitions: Bank Balance Sheet Survey issued by the Bank in December 2021
profit after tax means the net profit after tax reported by the deposit taker in accordance with the Income Statement Survey version 1.5 issued by the Bank in 2023 and the Procedures & Definitions: Income Statement Survey issued by the Bank in February 2021
risk-weighted assets means the deposit taker’s total risk weighted assets equivalents calculated in accordance with BPR100 Capital Adequacy, BPR130 Credit Risk RWAs Overview, BPR131 Standardised Credit Risk RWAs, BPR132 Credit Risk Mitigation, BPR133 IRB Credit Risk RWAs, and BPR160 Insurance, Securitisation, and Loan Transfers all issued by the Bank on 1 July 2024 and BPR110 Capital Definitions issued by the Bank on 1 October 2023
total capital means the deposit taker’s total capital calculated in accordance with BPR100 Capital Adequacy, BPR140 Market Risk, BPR150 Standardised Operational Risk, and BPR151 AMA Operational Risk all issued by the Bank on 1 July 2024 and BPR110 Capital Definitions issued by the Bank on 1 October 2023
total funding means the deposit taker’s total funding calculated in accordance with BS13 Liquidity Policy issued by the Bank in July 2022.
3 Definitions for other licensed deposit takers
In regulation 20(4),—
liquid assets means the sum of the following assets reported by the deposit taker in accordance with the Reserve Bank of New Zealand (RBNZ) prudential monitoring survey for NBDTs version 1.8 published on the Bank’s Internet site on 28 February 2022:
(a)
cash (including notes, coins, and gold bullion):
(b)
registered bank deposits and securities:
(c)
claims on government securities:
(d)
claims on public sector entities:
(e)
other assets that have an approved agency credit rating grade of 1, 2, or 3
market risk means the deposit taker’s aggregate amount for market risk and operational risk calculated in accordance with regulation 21 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010
net profit before tax means the net profit before tax reported to the Bank by the deposit taker in accordance with the Reserve Bank of New Zealand (RBNZ) prudential monitoring survey for NBDTs version 1.8 published on the Bank’s Internet site on 28 February 2022
net regulatory capital means the deposit taker’s capital calculated in accordance with regulation 10 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010
non-performing loans means the sum of the deposit taker’s gross loans 90-days-plus past due (not impaired) and gross impaired assets as reported in accordance with the Reserve Bank of New Zealand (RBNZ) prudential monitoring survey for NBDTs version 1.8 published on the Bank’s Internet site on 28 February 2022
risk-weighted assets means the deposit taker’s risk-weighted amount for credit risk calculated in accordance with regulation 11 of the Deposit Takers (Credit Ratings, Capital Ratios, and Related Party Exposures) Regulations 2010
total assets means the total assets reported by the deposit taker in accordance with the Reserve Bank of New Zealand (RBNZ) prudential monitoring survey for NBDTs version 1.8 published on the Bank’s Internet site on 28 February 2022
total gross loan book means the total gross loan book (excluding off-balance sheet loans) reported by the deposit taker in accordance with the Reserve Bank of New Zealand (RBNZ) prudential monitoring survey for NBDTs version 1.8 published on the Bank’s Internet site on 28 February 2022.
Rachel Hayward,
Clerk of the Executive Council.
Explanatory note
This note is not part of the regulations but is intended to indicate their general effect.
These regulations prescribe matters relating to the depositor compensation scheme (the DCS) set up under Part 6 of the Deposit Takers Act 2023 (the Act). The regulations come into force on 1 July 2025, the date on which the DCS commences. Under the DCS, deposits up to the value of $100,000 per depositor will be protected in the event of a deposit taker failing.
Part 1
Part 1 of the regulations includes provisions relating to the definition of a protected deposit and calculating and paying compensation under the DCS. In particular, it—
prescribes requirements that a debt security must satisfy to be a protected deposit (in addition to the requirements specified in section 192 of the Act); and
provides that debt securities issued by overseas deposit takers that mainly have wholesale clients are not protected deposits; and
specifies arrangements that are relevant arrangements in addition to the arrangement specified in section 191(2)(a) of the Act (meaning that, for the purposes of compensation, deposits held under those arrangements will be treated as the deposits of the underlying person for whom, or on whose behalf, the deposit is held); and
specifies kinds of trusts to which the section 209 entitlement rule for deposits held on trust does not apply; and
provides, in the case of deposits held by multiple people other than jointly, for how records of each person’s share must be kept, how the Reserve Bank must be notified of each person’s share if such records are not kept, and who is responsible for doing that in the case of a relevant arrangement; and
provides that a person’s entitlement to compensation is subject to conditions not to unreasonably delay in providing certain information that is needed by the Reserve Bank to efficiently and effectively calculate and pay compensation; and
prescribes how the Reserve Bank must pay compensation for deposits held under relevant arrangements.
Part 2
Part 2 of the regulations provides for the levy payable by deposit takers under section 235 of the Act. The levy is for the purpose of meeting the costs of the DCS.
The regulations set out the method for calculating the levy payable by a deposit taker. The levy will be calculated based on the amount of protected deposits that a deposit taker has, multiplied by the deposit taker’s levy rate. A deposit taker’s levy rate will depend on its risk category, which will be determined using prudential capital, liquidity, profitability, and asset quality indicators.
The Reserve Bank will use data collected from deposit takers as part of its regular survey monitoring for the purposes of the levy calculation.
For the transitional period (see Schedule 1 of the Act), a deposit taker that is a credit union, building society, or registered charity and not a registered bank will be charged at a flat levy rate of 0.055% (unless it falls within the lowest risk category, in which case its levy rate is 0.053%). This recognises the challenges that the levy poses to the soundness of those entities, especially during the period in which those entities are preparing for and transitioning to the new prudential framework under the Act.
Part 2 also provides for—
the levy to be reduced proportionally if a deposit taker is licensed for only part of a year; and
the rate of interest on unpaid levy amounts; and
waivers and refunds of the levy in certain circumstances; and
recalculation of the levy on application of a deposit taker to correct data used in the levy calculation; and
the levy to be exclusive of GST.
Regulatory impact statement
The Reserve Bank of New Zealand produced a regulatory impact statement on 15 July 2024 to help inform the decisions taken by the Government relating to the contents of this instrument.
A copy of this regulatory impact statement can be found at—
Date of notification in Gazette: 30 January 2025.
These regulations are administered by the Reserve Bank of New Zealand.