Plain language law

New Zealand law explained for everyone

Deposit Takers Act 2023

Crisis management and resolution - Conduct of resolution - Bank may dispose of business undertaking or property, rights, or liabilities

329: Provisions applying where liabilities included in sale

You could also call this:

"What happens when a bank sells a problem it's responsible for to someone else"

Illustration for Deposit Takers Act 2023

When a bank sells its business or some of its property, it can also sell some of its liabilities. If this happens, you need to know what it means for the bank and the people involved. The bank is no longer responsible for the liability it sold, from the date of the sale. You can now ask the person who bought the liability to fulfil their obligations, just like you could have asked the bank before. The bank is still responsible for any part of the liability that was not sold.

If the liability is from a company set up under section 314, or from an overseas business, the rules are a bit different. In these cases, the overseas person is still responsible for the liability, even if it was sold.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS534974.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
Previous

328: Proof of transactions, or

"Showing proof of buying, selling, or transferring property from a bank or other deposit taker"

Next

330: Bank may suspend payment of money owing, or

"Banks can temporarily stop paying back money they owe you if they're having problems."

Part 7Crisis management and resolution
Conduct of resolution: Bank may dispose of business undertaking or property, rights, or liabilities

329Provisions applying where liabilities included in sale

  1. If all or any part of a liability of a licensed deposit taker (A) is included in any sale, transfer, or other disposition under section 319,—

  2. A, as from the date of the sale, transfer, or other disposition, is relieved from all its obligations in respect of the liability, or part of it; and
    1. the person entitled to performance in respect of the liability may enforce performance of the liability or part of it against the person to whom the sale, transfer, or other disposition is made in the same manner and to the same extent as the person was entitled to enforce performance against A; and
      1. the inclusion of part of a liability does not relieve A from any obligation in respect of any part of the liability not included in the sale, transfer, or other disposition.

        1. If all or any part of a liability of a body corporate formed and registered under section 314, or all or any part of a liability relating to the business carried on by an overseas person, is included in the sale, transfer, or other disposition, subsection (1)(a) does not relieve any overseas person from any obligation in respect of that liability.

        Compare