Reserve Bank clears the way for more businesses to call themselves banks

Thursday, 4 June 2026

Reserve Bank says stronger oversight means more businesses can use the word “bank”.

More financial institutions will be able to call themselves banks from 2028 under a decision announced by the Reserve Bank.

The change means some businesses that take deposits from customers but are not currently allowed to use the word “bank” will be able to adopt it if they are licensed under new rules.

The Reserve Bank announced the decision on Thursday after consulting on who should be allowed to use the words “bank”, “banker” and “banking”.

At the moment, those terms are largely reserved for registered banks. Businesses known as non-bank deposit takers can take deposits from customers, but cannot call themselves banks.

Despite the Reserve Bank holding the Official Cash Rate, many New Zealanders are still grappling with the cost of living crisis as job opportunities remain scarce and businesses feel the pinch.

That will change when the Deposit Takers Act comes fully into force on December 1, 2028.

Acting Assistant Governor for Financial Stability Angus McGregor said the Reserve Bank was satisfied the new law included enough safeguards to allow the change.

“We are satisfied that the DTA provides the necessary safeguards to extend the use of restricted words to all licensed deposit takers. This change supports improvements in the competitive landscape and a consistent approach across deposit takers, which was largely supported in consultation feedback,” McGregor said.

The new law introduces a depositor compensation scheme, gives the Reserve Bank stronger supervision powers and creates a process for dealing with institutions that get into financial trouble.

The Reserve Bank said the changes would give it greater ability to monitor financial institutions and step in if customers’ money or the wider financial system was at risk.

“The DTA provides for closer regulation of all deposit takers and gives us new powers to make sure entities able to call themselves banks are doing the right things to keep depositors’ money safe,” McGregor said.

The change gives licensed non-bank deposit takers the option of rebranding as banks if they choose.

The Reserve Bank also confirmed overseas banks without a physical presence in New Zealand will still be able to use banking terms for some wholesale activities, provided they meet the requirements of the Act.

Financial service providers that are not regulated by the Reserve Bank will continue to be barred from using the words “bank”, “banker” and “banking”.

The new rules will take effect on December 1, 2028.