RBNZ invites feedback on its proposed policy for branches of overseas banks

The Reserve Bank of New Zealand is inviting feedback on the second and final consultation on the review of its policy for branches of overseas banks.

Key proposals outlined in the paper include that all branches in New Zealand be restricted to engaging in wholesale business – that is with corporates, institutions and other wholesale investors, meaning they could not take retail deposits or offer products or services to retail customers.

Another proposal is to limit the maximum size of a branch to NZ$15 billion in total assets.

It is also suggested that the RBNZ continues to allow the dual registration of branches, provided the relevant subsidiary and branch are sufficiently separate, and any identified risks are mitigated by specific conditions of registration; and dual-registered branches only conduct business with large wholesale customers – those with consolidated turnover greater than NZ$50 million.

The RBNZ says it anticipates that final decisions on the review will be taken in early 2023 after submissions on the second consultation have been considered. It is proposing a three-year transition period for full implementation.

The RBNZ welcomes submissions on the policy questions set out in its branch policy consultation, and any alternative options or proposals. These should be made before 16 November 2022.

The central bank will also be hosting a webinar on Wednesday 31 August 2022. Any interested parties are welcome to attend.