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Deposit Takers Act 2023

Crisis management and resolution - No creditor or shareholder worse off - Compensation notice and payments

384: Bank must pay in accordance with regulations

You could also call this:

"Banks must pay you money they owe you in a way that follows the rules."

Illustration for Deposit Takers Act 2023

If you get a compensation notice from a valuer, it means you might be eligible for some money. The notice will say how much money you can get. You will get this money if you do not appeal the decision within a certain time, or if you do appeal and the court decides you are eligible for the money. The court's decision is made under rules like those in section 391 and section 392.

The Bank has to pay you the money in a way that follows the rules. They can also choose to pay the money in another way that they think is suitable. The amount of money you get is what the valuer decided, unless a court decided something different.

The Bank can decide how to pay you the money, including paying it to someone else to hold for you. This means they can choose to pay the money to someone who will look after it for you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS553191.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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383: Bank must manage and administer payments of compensation, or

"Banks must help people get the compensation they are owed"

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385: Crown must provide money necessary to pay compensation, or

"The government must pay you if you're owed compensation and there's not enough money in the fund."

Part 7Crisis management and resolution
No creditor or shareholder worse off: Compensation notice and payments

384Bank must pay in accordance with regulations

  1. This section applies if—

  2. the valuer has sent a compensation notice to a person (A) that specifies that A is eligible for compensation of a particular amount; and
    1. either—
      1. no appeal has been brought under section 391 in relation to A within the period specified in section 392; or
        1. such an appeal has been brought, and it has been determined by, or under, an order of the court that A is eligible for compensation of a particular amount.

        2. The Bank must pay the compensation to, or on account of, A—

        3. in the manner prescribed by the regulations; and
          1. otherwise in the manner that the Bank thinks fit.

            1. The amount of compensation is—

            2. the amount determined by the valuer (unless paragraph (b) applies); or
              1. the amount determined by, or under, an order of the court.

                1. The Bank’s power to decide the manner in which compensation is paid includes deciding to pay it to a person to hold on behalf of A (whether or not on trust).