RBNZ’s approval proposed for significant ownership transfer of NBDT

This is one of the significant additional norms that the RBNZ is proposing and has issued a consultation paper to attract submissions.

The new norm is in line with the one applicable for registered banks though the threshold is higher than under the banking regime. Under the proposal, when a person is likely to hold 20% or more of the NBDT's voting securities or at least 25% of NBDT's governing body, it should first inform the RBNZ.

This rule is mainly aimed at limiting concentrations in ownership of a finance company, and limiting the possibility of a finance company being used as a captive source of finance for its owners.

The other proposals that the RBNZ is now consulting on, some of them again, relate to "fit and proper" requirements.  RBNZ wants the power to ensure that directors and senior office holders that do not have suitable experience, skills, and qualifications are either not appointed, or can be removed by the central bank.