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Deposit Takers Act 2023

Regulation of deposit takers - Directors’ and New Zealand chief executive officers’ due diligence duty

93: Duty of directors of licensed deposit takers

You could also call this:

"Directors of banks and other deposit takers must carefully follow important financial rules."

Illustration for Deposit Takers Act 2023

You are a director of a licensed deposit taker. You must make sure the deposit taker follows its prudential obligations. You have to be careful and diligent, like a reasonable director would be, when making decisions. You need to think about the size and type of business the deposit taker has, and what your role is as a director. You have to know what prudential obligations are, which is explained in section 6. But this does not include rules from the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. This rule does not apply to overseas licensed deposit takers, you can see section 94 for those rules instead. If you do not follow this rule, you might have to pay a penalty, subpart 2 of Part 5 explains this.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS495636.

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92: Standards may provide for matters to be specified by conditions, or

"Rules can be tailored to fit each deposit taker's situation using special conditions."

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94: Duty of New Zealand chief executive officers of overseas licensed deposit takers, or

"Overseas deposit taker bosses in New Zealand must follow the rules to keep people's money safe"

Part 3Regulation of deposit takers
Directors’ and New Zealand chief executive officers’ due diligence duty

93Duty of directors of licensed deposit takers

  1. Every director of a licensed deposit taker must exercise due diligence to ensure that the deposit taker complies with its prudential obligations.

  2. For the purposes of this section, the director must exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances, taking into account (without limitation)—

  3. the size and nature of the business of the deposit taker; and
    1. the position of the director and the nature of the responsibilities undertaken by the director.

      1. In this section, prudential obligation has the meaning set out in section 6, except that it does not include an obligation imposed by or under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 or regulations made under that Act.

      2. This section does not apply in relation to an overseas licensed deposit taker (see instead section 94).

      3. See subpart 2 of Part 5, which provides for a court to impose a pecuniary penalty for a contravention of the duty under this section.

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