Restricted Banking Licence

APRA has introduced a phased approach to licensing new authorised deposit-taking institutions (ADIs). You can read about that phased approach in APRA's Information Paper "ADI Licensing: Restricted ADI Framework 4 May 2018".

The phased approach to licensing allows for APRA to issue a restricted ADI licence (RADI licence) to institutions that require time to develop resources and capabilities to pursue a full ADI licence. It enables a RADI licensee to conduct limited, lower risk banking during its RADI licence phase (RADI phase) without having to comply with the full prudential framework for ADIs. During its RADI phase, a RADI licensee:

  • must demonstrate progress towards fully meeting all aspects of APRA's prudential framework, to support APRA issuing it a full ADI licence;
  • must still meet other Australian legislative and regulatory requirements that apply to the licensee. That will include obligations under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth); and
  • is restricted in how much deposits it can take: deposits of no more than $250,000 from any one depositor; and $2million of deposits in total. Those restrictions are designed to maintain appropriate levels of financial safety, stability and competitive neutrality while the RADI licensee progresses to meeting all aspects of the prudential framework relevant to the RADI licensee's business and to securing a full ADI licence.

The expectation is that any RADI licensee would transition to a full ADI licence within two years of being granted its RADI licence or leave the industry. Every RADI licensee must have an exit plan covering repaying depositors, if it does not progress to a full ADI licence.

APRA issued a RADI licence to Volt Bank on 7 May 2018. Volt Bank is proud to be the first institution to whom APRA issued a RADI licence. In the course of its RADI licence application, Volt Bank had to satisfy APRA that (among other things), if granted a RADI licence, Volt Bank would:

  • be financially sound;
  • manage its risks effectively;
  • meet fit and proper expectations;
  • have a sound risk culture;
  • satisfy prudential requirements that apply during its RADI phase; and
  • not pose a risk to the safety of depositors' funds or the stability of the financial system.

During its RADI phase, Volt Bank will undertake a limited amount of business to test its systems and ensure it can meet the full prudential framework for ADIs. If you are on a wait list for a Volt Bank product, Volt Bank can make that product available to you only once Volt Bank receives its full ADI licence. We will contact you as soon as we can!

APRA will monitor Volt Bank closely during Volt Bank's RADI phase to check how Volt Bank is progressing towards a full ADI licence. Volt Bank has arrangements in place to assist in ensuring that if, Volt Bank does not secure a full ADI licence, it can repay its depositors in full.

Volt Bank has until 7 May 2020 to transition to a full ADI licence. We are confident we will do so well before then.

Volt Bank is looking forward to giving you the best customer experience in banking and sparking your change.