New Zealand inches closer to implementing Depositor Compensation Scheme

RBNZ initiates consultation of proposed act

New Zealand inches closer to implementing Depositor Compensation Scheme

New Zealand’s financial landscape is on the brink of a significant transformation as the Reserve Bank of New Zealand - Te PÅ«tea Matua (RBNZ) moves closer to launching the Depositor Compensation Scheme (DCS) under the newly introduced Deposit Takers Act (DTA).

After a nine-month process of consultation and engagement with stakeholders within the deposit taking sector, the Reserve Bank has revealed in a statement that it is poised to unveil the next phase of policy proposals for the DCS under the DTA.

Kate Le Quesne (pictured), director of prudential policy at RBNZ, highlighted essential components outlined in the proposed regulations, including the method for calculating levies, eligible products, and the extent of coverage.

“Feedback from stakeholders is a valuable and important part of the policy development process, and we welcome input on the rules needed to establish the DCS, scheduled to be live in mid-2025, ahead of the DTA legislation coming into effect in 2028,” Le Quesne said.

Objectives of the new scheme

The DTA will give the Reserve Bank enhanced supervisory powers over banks and, beginning in 2028, over credit unions, building societies, and finance companies. Recognizing the diversity within the deposit-taking sector, Le Quesne underscored the overarching objective of fostering a resilient, stable, and inclusive financial environment conducive to a sustainable and productive economy.

“The long-term outcome of implementing the DTA is to achieve a resilient, stable and inclusive financial environment that contributes to a sustainable and productive economy. Financial stability is an important contribution we can make to promoting the wellbeing and prosperity of New Zealanders,” Le Quesne said.

At the heart of the act lies the establishment of the Depositor Compensation Scheme, a mechanism designed to instill greater confidence among New Zealanders regarding the safety of their deposits.

The ongoing consultation invites feedback on various aspects, including the proposed levy calculation methodology, the scope of DCS coverage, and operational intricacies. It also delineates the products earmarked for coverage under the DCS, presenting alternative options for consideration.

Come mid-2025, eligible deposits will enjoy protection of up to $100,000 per customer, per deposit taker.

Interested parties can participate in the consultation process until May 10 through the consultation materials available at

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