Published Mon, Aug 25, 2025 · 07:16 AM
[WELLINGTON] New Zealand’s central bank said on Monday (Aug 25) that it was proposing to reduce the minimum capital requirement for deposit takers, and had begun consultations.
The central bank said in a statement that one key policy option is to reduce the minimum capital requirement for deposit takers to NZ$5 million (S$3.8 million) from NZ$30 million.
“This reduces barriers to entry,” the statement said.
It noted in the consultations document that any shift in regulation is not expected to cause significant economic change. The current, rising capital requirements were announced in 2019 and are being brought in slowly, with full implementation not expected before 2028.
However, the requirements have been criticised by some politicians and parts of the public, who argue the requirements have reduced capital in the economy and borrowers have had to bear extra costs. In March, the central bank said that it would be reviewing the requirements.
“It’s essential we strike the right balance – protecting depositors and the wider economy, while supporting competition and economic efficiency,” Reserve Bank of New Zealand governor Christian Hawkesby said.
New Zealand Finance Minister Nicola Willis said that she welcomed the opening of consultation on the Reserve Bank’s review of capital settings for banks and other deposit takers.
The central bank hopes to reach a final decision by the end of the year. REUTERS
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