The Reserve Bank regulates non-bank deposit takers (NBDTs) in New Zealand for the purposes of promoting the maintenance of a sound and efficient financial system, and avoiding significant damage to the financial system that could result from the failure of an NBDT.

NBDTs are defined in the Reserve Bank of New Zealand Act 1989 (the Act), (which refers to these entities as "deposit takers"), as entities that are not registered banks but which issue debt securities (as defined in the Securities Act 1978) to the public and carry on the business of borrowing and lending money, or providing financial services (or both). The definition includes building societies and credit unions.

Trustee companies are responsible for supervising NBDTs’ compliance with the prudential regulations established by the Reserve Bank.

A minimum capital ratio, calculated according to the framework prescribed by the Reserve Bank, is required to be included in NBDTs’ trust deeds.

This ratio must be at least 8 percent for NBDTs with a credit rating from an approved credit rating agency. For those exempted from having a credit rating from an approved rating agency, the minimum capital ratio specified in the trust deed must be at least 10 percent.

In December 2005, the government agreed that the Reserve Bank should be the sole regulator of the New Zealand financial system, including the NBDT sector. In September 2008, the Reserve Bank Amendment Act was passed, laying the foundation for the prudential regulations for NBDTs that have been, or are currently being, developed by the Reserve Bank.

The NBDT sector is an important component of the broader financial system because it provides funding to sectors of the economy that the mainstream banks often avoid, and provides alternative investment options for individuals and organisations.

NBDTs perform bank-like functions, including providing on-call or short-term deposit facilities and the provision of payments services.

Although the NBDT can operate in a similar way to a fully licensed bank, the word “bank” cannot be included in the name. Activities of an NBDT can include but they are not limited to:

• Deposit taking & lending
• Debit and credit card services
• Issuing of financial guarantees and instruments
• Cash management services
• Current accounts
• Cheque (Checking) accounts
• Term deposits
• Wire transfer services
• Payment processing services

The company could be subject to capital reserve requirements. Directors and Shareholders can be of any nationality and resident anywhere.
The NBDT is subject to Central Bank supervision and regulation.

This type of companies, after have been set up, require more attention being non-residents in New Zealand. NIS offers several facilities to allow you to work without surprises and legal consequences.
Below services that you will be able to consider through our consulting:

• Buy or Rent an On-Line Banking Software
• New Zealand Address
• Introducing to open a Bank Account
• Introducing to open a Money Transfer Platform
• Introducing to make an agreement with an Investment Management Company
• Resident Agent
• Resident Accountant
• Resident Lawyer

Caution: "New Zealand offshore finance companies"

The Reserve Bank advises that caution should be exercised by anyone considering doing any form of business with entities that promote themselves as "New Zealand offshore finance companies", or use similar descriptions, and that offer financial services either on-line or from locations outside of New Zealand.

No such category of entity is recognised under New Zealand law. The entities involved are usually just registered in New Zealand as companies or limited partnerships, and they have no special status. These entities are not licensed or supervised as financial service providers by any New Zealand authority. They are required to register a New Zealand address, but this is usually that of a compliance agent, with the entities having no real physical presence in New Zealand. These entities are often directed or owned by persons who are not resident in New Zealand.

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