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Deposit Takers Act 2023

Depositor compensation scheme - Bank assumes rights and remedies in relation to protected deposit

228: Bank may apportion compensation to determine respective rights and remedies

You could also call this:

"The bank decides how to share compensation for your protected deposits."

Illustration for Deposit Takers Act 2023

If you get compensation from the Bank for your protected deposits, it might be for more than one deposit. The Bank pays you this compensation if the amount is less than what is stated in section 203(1)(a). You should know the Bank decides how to split the compensation between your deposits.

The Bank can choose how to divide the compensation between the different deposits. It can also decide how to split the compensation between the main amount and the interest. This means the Bank decides how much of the compensation is for the main amount and how much is for the interest.

The Bank's decision on how to split the compensation is final and applies to you, the deposit taker, the Bank, and anyone else involved. This decision helps figure out everyone's rights, obligations, and remedies regarding the protected deposits.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS527623.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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227: Bank’s right of subrogation, or

"When a bank pays you for a protected deposit, it takes over some of your rights to deal with the deposit taker."

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229: Subpart does not limit or affect other rights or remedies, or

"This law doesn't stop you using other rules that can help you."

Part 6Depositor compensation scheme
Bank assumes rights and remedies in relation to protected deposit

228Bank may apportion compensation to determine respective rights and remedies

  1. This section applies if—

  2. the Bank pays compensation to, or on account of, an eligible depositor (A) in respect of 2 or more protected deposits issued by a licensed deposit taker (B); and
    1. the amount that is paid is less than the total amount referred to in section 203(1)(a).

      1. The Bank may apportion the compensation to 1 or more of the protected deposits in the manner that the Bank thinks fit.

      2. The Bank’s power includes the power to apportion the compensation between principal and interest.

      3. The Bank’s apportionment is binding on each relevant person, B, the Bank, and any third parties for the purposes of determining rights, obligations, and remedies in respect of the protected deposits.