The Reserve Bank has confirmed that from December 2028, all licensed deposit takers — including building societies, credit unions, and finance companies — will be able to use the words 'bank', 'banker', and 'banking'. The change follows the introduction of the Deposit Takers Act and a new depositor compensation scheme.
From the end of 2028, New Zealand's building societies, credit unions, and finance companies will be able to describe themselves as banks — a significant shift in how the country's deposit-taking landscape is structured.
Currently, the use of the words "bank", "banker", and "banking" is restricted under the Banking (Prudential Supervision) Act. The restriction was designed to help the public identify which entities were subject to prudential regulation. However, the Reserve Bank has now confirmed that when the Deposit Takers Act (DTA) comes fully into effect on 1 December 2028, all licensed deposit takers will be able to use the restricted words.
The RBNZ's Acting Assistant Governor for Financial Stability, Angus McGregor, said the change reflected a broader overhaul of how deposit takers are supervised in New Zealand.
"We are satisfied that the DTA provides the necessary safeguards to extend the use of restricted words to all licensed deposit takers," McGregor said. "This change supports improvements in the competitive landscape and a consistent approach across deposit takers."
The DTA introduces several new protections that the RBNZ said gave it confidence the restriction could be safely lifted. These include the new Depositor Compensation Scheme, which provides coverage for depositors if a licensed deposit taker fails. The Act also gives the RBNZ stronger powers to monitor the financial stability of deposit takers and to intervene if a deposit taker's business practices are putting depositors' money at risk.
The RBNZ consulted on the change last year and said the feedback from that process was largely supportive of expanding the use of the restricted words. Overseas banks that do not have a physical presence in New Zealand can continue to use the words as authorised under the DTA.
For consumers, the practical effect will be that some entities previously known as credit unions or building societies may begin to market themselves as banks from late 2028. The RBNZ said the DTA framework ensured all entities using the restricted words would be subject to the same supervisory standards and depositor protection requirements, regardless of their previous label.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.