Banking Act 1959

Part II - Provisions relating to the carrying on of banking business  

Division 2AA - Financial claims scheme for account-holders with insolvent ADIs  

Subdivision A - Preliminary  

SECTION 16AB  

16AB   Purpose of this Division  

The main purpose of this Division is to provide for a scheme that:

(a) allows the Minister to make a declaration about an ADI if:

(i) APRA has applied under section 16AAA for the ADI to be wound up; or

(ii) a Banking Act statutory manager is in control of the ADI ' s business; and

(b) entitles account-holders who have certain protected accounts with a declared ADI to be paid certain amounts to maintain the account-holders ' liquidity before they would receive payment in a winding up of the ADI; and

(c) substitutes APRA for those account-holders as a creditor of the declared ADI to the extent of the entitlements; and

(d) allows APRA to facilitate a transfer of business from the declared ADI to a receiving body under the Financial Sector (Transfer and Restructure) Act 1999 by entitling the receiving body to amounts in respect of the protected accounts.