New Zealand to let all deposit takers call themselves banks

Non-bank deposit takers will be able to use restricted words by December 2028.

All deposit takers in New Zealand can now call themselves a bank beginning late 2028, so long as they are licensed under the Deposit Takers Act 2003 (DTA), the Reserve Bank of New Zealand (RBNZ) announced.

Non-bank deposit takers were previously barred from using the word “bank” under the Banking (Prudential Supervision) Act 1989.

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 restricted words, the RBNZ said on 4 June 2026.

Angus McGregor, RBNZ Acting Assistant Governor, said that they 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,” McGregor said.

Overseas banks that do not have a physical presence in New Zealand can continue to use restricted words, as is authorised under the DTA, the central bank added.

Under the 1989 act, overseas banks that do not have a place of business in New Zealand can use restricted words for certain wholesale activities.

Financial service providers that fall outside of RBNZ’s prudential regulatory perimeter will still not be allowed to use restricted words, including “bank.”

Apart from expanding the use of the word “bank”, the DTA provides for new supervision powers and a framework for managing and resolving a deposit taker in financial distress.

The DTA also gives RBNZ greater power to monitor deposit taker stability and step in if a deposit taker’s financial situation or business practices are putting depositors’ money, and New Zealand’s financial system, at risk, the RBNZ said.