Deposit Takers Act 2023

Depositor compensation scheme - Deficiency in fund

248: Deficiency in fund when specified event notice issued

You could also call this:

"What happens if there's not enough money to pay people when the Bank sends a special notice"

Illustration for Deposit Takers Act 2023

If the Bank issues a specified event notice, you need to know what happens if the fund's property is not enough to pay for certain things. The fund might not have enough to pay people the compensation they are entitled to under this Part, or to cover all the other costs of the Bank doing its job. The Bank's job includes performing or exercising its functions, powers, or duties under this Part.

If there is not enough money in the fund, the Minister must give the fund some money from public funds to cover the shortage. This money can be given as a grant or an advance, and it is done without needing any further approval than what this section says.

The Minister's job is to make sure the fund has enough money to do what it needs to do when the Bank issues a specified event notice, by providing the necessary money from public funds.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS506256.


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249: Deficiency in fund when supporting resolution measure, or

"What happens if a special fund doesn't have enough money to pay out"

Part 6Depositor compensation scheme
Deficiency in fund

248Deficiency in fund when specified event notice issued

  1. This section applies if the Bank has issued a specified event notice but the property of the fund is not sufficient to do 1 or both of the following in connection with the notice:

  2. pay entitlements to compensation under this Part:
    1. meet all other costs of the Bank in performing or exercising its functions, powers, or duties under this Part.
      1. The Minister must provide to the fund out of public money, without further appropriation than this section, money by way of grant or advance as may be necessary to meet the deficiency.