The Australian Prudential Regulation Authority (APRA) has published updated guidelines on the use of restricted words (such as the words ‘bank’, ‘banker’ and ‘banking’) under the Banking Act.
Under section 66 of the Banking Act 1959, businesses that are not authorised deposit-taking institutions (ADIs) are not permitted to use certain restricted words and phrases related to banking, unless consent is granted by APRA.
The restricted words are:
- ‘bank’, ‘banker’ and ‘banking’;
- ‘building society’, ‘credit union’, ‘credit society’ and ‘credit co-operative’;
- ‘authorised deposit-taking institution’; and
- ‘ADI’ (except where these letters are used as part of another word).
If a business is a financial business that is not an ADI, and it wishes to use a restricted word or expression, it must apply to APRA for approval.
If it proposes to use a company name or business name that contains a restricted word or expression, it is required to obtain confirmation from APRA that section 66 or 66A does not apply before registering the name with the Australian Securities and Investments Commission (ASIC).
There is no restriction on an ADI using the restricted expressions ‘authorised deposit-taking institution’ and ‘ADI’.
An ADI is also permitted to use the restricted words ‘bank’, ‘banker’ and ‘banking’ unless APRA determines otherwise.