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Deposit Takers Act 2023

Supervision of deposit takers - Remedial notices and plans

119: Bank may require licensed deposit taker to take action in relation to contravention

You could also call this:

"The Bank can tell a deposit taker to fix a problem if they break a rule or might break one."

Illustration for Deposit Takers Act 2023

If you are a licensed deposit taker, the Bank can ask you to take action if you have broken a rule or might break a rule. The Bank can do this if you have given them a report under subpart 3 or if they have a good reason to think you have broken a rule. The Bank will send you a notice, called a remedial notice, telling you what to do. You will have to do what the notice says, like fixing a problem or making a plan to stop the problem from happening again.

The plan, called a remedial plan, must say what you will do to fix the problem and when you will do it. You must also say how you will keep the plan up to date and do anything else the notice asks you to do. You have to follow the notice and do what it says.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS496779.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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118: Restriction on use of report, or

"Reports from banks and lenders can't be used against them in court, except to prove they're false."

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120: Bank’s consideration of remedial plan, or

"The Bank checks and decides on a deposit taker's plan to fix problems."

Part 4Supervision of deposit takers
Remedial notices and plans

119Bank may require licensed deposit taker to take action in relation to contravention

  1. This section applies if—

  2. a licensed deposit taker has given the Bank a report under subpart 3; or
    1. the Bank otherwise has reasonable grounds to believe that a licensed deposit taker has contravened, may have contravened, or is likely to contravene a prudential obligation.

      1. The Bank may, by notice (a remedial notice), require the deposit taker—

      2. to take specified actions within a specified period—
        1. to address the cause, or to remedy or mitigate the consequences, of the contravention; or
          1. to ensure that the contravention does not occur or recur; or
          2. to give to the Bank a plan (a remedial plan).

            1. The remedial plan must set out the following:

            2. actions that the deposit taker will take—
              1. to address the cause, or to remedy or mitigate the consequences, of the contravention; or
                1. to ensure that the contravention does not occur or recur:
                2. an appropriate timetable for taking the proposed actions to ensure that they are taken as soon as practicable:
                  1. steps that the deposit taker will take to keep the plan current:
                    1. any other matters required by the remedial notice.

                      1. The deposit taker must comply with a remedial notice in the manner specified in the notice.