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Compliance

Taiwanese bank granted foreign ADI licence

by Will Paige10 minute read
APRA

An Asian bank has received a banking licence allowing it to provide services to wholesale clients in Australia and set up a branch in the country.

The Australian Prudential Regulation Authority (APRA) has granted Land Bank of Taiwan a licence to operate as a foreign authorised deposit-taking institution (foreign ADI) under the Banking Act 1959.

Land Bank of Taiwan is a state-owned bank operated by the Taiwanese administration. It mainly focuses on real estate and agricultural credit, supporting national policies including real estate financing, agricultural credit, and land management initiatives for the state.

The Taipei-headquartered lender offers a range of banking services to individuals and enterprises including deposits, loans, foreign exchange, and fund management services.

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The bank also offers wealth management services and investment products covering insurance, funds, foreign bonds, and gold passbooks and manages assets and estates on behalf of clients.

Land Bank of Taiwan is one of the largest financial institutions in Taiwan, with assets totalling over NT$2 trillion (around $98 billion).

By receiving a foreign ADI, Land Bank of Taiwan can conduct banking business and provide services to wholesale clients in Australia while also setting up a branch in the country.

Land Bank of Taiwan has previously expressed plans to expand its presence in South-east Asia beyond its home country.

As a state-owned bank, Land Bank of Taiwan is part of Taiwan’s Deposit Insurance Corporation, meaning that deposits held with the bank are protected by the government’s deposit insurance scheme, offering security to customers.

While the foreign ADI licence means that Land Bank of Taiwan is not subject to the same capital requirements as Australian-owned banks, the lender will still need to meet local regulatory standards, which could introduce more scrutiny on its operations.

Foreign ADIs are exempt from certain capital requirements by APRA, but are required to meet other regulatory obligations such as liquidity standards and reporting requirements. These regulations ensure that foreign banks operate in a manner consistent with Australia’s financial stability and consumer protection framework.

The issuance of new banking licences has slowed in recent years, following a swathe of bank failures.

However, in March 2024, Avenue Bank, a digital business bank based in Sydney, received an unrestricted banking licence from APRA. It had previously been operating under a restricted licence.

[Related: Mutual bank members vote in favour of merger]

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