The Government of New Zealand has announced plans to introduce a bank deposit protection regime.
The proposal was announced by New Zealand Finance Minister Grant Robertson following in-principle approval by the union cabinet.
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It aims to guarantee deposits between NZ$30,000 ($19,797) and NZ$50,000, a move which will cover nearly 90% of individual bank deposits in the country.
The New Zealand bank deposit protection regime proposal forms a part of the Phase 2 of the Review of the Reserve Bank Act to revise the old banking laws.
The list of proposals under the phase 2 also includes bolstering oversight over banks’ actions. These steps are expected to make New Zealand’s banking system safer for customers and increase public confidence.
Robertson said: “Now is the right time to check we have the tools to make sure banks meet their obligations to New Zealanders, and the powers to enforce them.
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By GlobalData“The Government is also making sure New Zealand follows international best practice for promoting public confidence in our banking system, including on the issue of depositor protection.”
The final decisions on the deposit protection regime and accountability standards are expected to be announced in early 2020.
The Review of the Reserve Bank Act was agreed by the present coalition partners of the government.
The government has already delivered the Phase 1 of the review, which encompassed updating the monetary policy settings.
