APRA has released a discussion paper on proposed revisions to the licensing framework for authorised deposit-taking institutions (ADIs). The discussion paper seeks to introduce a phased approach to authorisation to reduce the complexity of navigating the licensing process and increase competition in the banking sector by lowering barriers to entry.
The introduction of a restricted ADI licence, subject to eligibility requirements and a maximum use period, is particularly relevant for fintech businesses seeking to begin limited banking operations while developing the resources and capabilities necessary for full prudential compliance. Similar steps have been taken in the US to facilitate entry of fintechs to the banking system (discussed in our earlier update).
Submissions regarding the proposed phased approach to licensing new entrants to the banking sector close on 30 November 2017.