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Deposit Takers Act 2023

Enforcement - Ban ordered by District Court

177: Power to ban certain persons from participating in deposit-taking business

You could also call this:

"The court can ban people from working in banking if they've done something very wrong."

Illustration for Deposit Takers Act 2023

The District Court can stop someone from working in a deposit-taking business if you think they have done something seriously wrong. You might think they are not a good person to be in this business because of what they have done, as described in section 178. The court can also stop someone if they have not followed an order under section 29, or if they have not done their job properly as a director or chief executive officer, as required by section 93 or section 94.

If you are a director of a deposit-taking business and it has broken important rules, the court can stop you from working in the business if you have not tried to stop the business from breaking those rules. The court can also stop someone from working in a deposit-taking business if they are not allowed to do so in another country, as described in section 178.

If someone wants to ask the court to stop another person from working in a deposit-taking business, they must make a formal application to the court.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS497929.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesCrime and justice > Courts and legal help
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176: Liability of directors if licensed deposit taker or associated person commits offence, or

"Directors can be in trouble if their company breaks the law and they knew or should have known about it"

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178: Type of order, or

"What kind of ban can be placed on working with banks or other deposit takers?"

Part 5Enforcement
Ban ordered by District Court

177Power to ban certain persons from participating in deposit-taking business

  1. The District Court may, on the application of the Bank, make an order in respect of a person under this subpart if the court considers that the person—

  2. has engaged in an act, an omission, or a course of conduct that constitutes serious wrongdoing and that the person is not a fit and proper person to participate in a deposit-taking business in 1 or more of the ways described in section 178; or
    1. has failed to comply with an order under section 29; or
      1. as a director of a licensed deposit taker, has persistently or seriously failed to comply with section 93 (directors’ due diligence duty); or
        1. as a New Zealand chief executive officer of an overseas licensed deposit taker, has persistently or seriously failed to comply with section 94 (New Zealand chief executive officers’ due diligence duty); or
          1. is a director of a licensed deposit taker that has persistently or seriously contravened any prudential obligation, and the person has persistently failed to take reasonable steps to prevent or stop the deposit taker’s contravention; or
            1. is prohibited from participating in a deposit-taking business in 1 or more of the ways specified in section 178 under an order made, or a notice given, under a law of a country, State, or territory outside New Zealand.

              1. Every application to the court under this section must be made by an originating application.