Regulatory Alerts2022-05-17
Proposal for New Regulations on Capital, Related Party, and Credit Rating Requirements for Non-Bank Deposit Takers
The Office of the Minister of Finance proposes new prudential regulations under the Reserve Bank of New Zealand Act 1989 to establish a standardized capital adequacy framework, related party exposure limits, and credit rating mandates for non-bank deposit takers. The regulations require all non-bank deposit takers to maintain a minimum capital ratio of 8% of risk-weighted exposures if they hold an approved credit rating, or 10% if unrated, while capping aggregate lending to related parties at 15% of capital. Additionally, entities with liabilities exceeding $20 million must obtain a long-term local currency issuer rating from a Reserve Bank-approved agency to restore depositor confidence and mitigate systemic risk.
Share