Applications for bank licences in 3 weeks?

Press, 28 August 1984, Page 30

Applications for bank licences in 3 weeks?

By AAP correspondent, Mike Lawson NZPA-AAP Canberra Applications for new banking licences in Australia may be sought by the Federal Treasurer, Mr Paul Keating, within three weeks. A submission by Mr Keating setting down guidelines for applications is likely to go to the Federal Cabinet for approval either next Monday or on September 10. The Treasurer hopes to call for expressions of interest before he leaves on September 17 to attend the International Monetary Fund’s annual meeting in Washington. The Federal Cabinet is not expected to decide for some time how many licences will be granted and may leave the decision to Mr Keating alone. The Treasurer is believed to prefer to see the quality of applications before decia-

ing the number of new banking authorities. A decision on successful tenderers may be delayed also because of the Federal election expected to be held by the end of this year. The National Bank of New Zealand is considered a near certainty for a licence, because of pressure from the New Zealand Government and because it would allow the bank’s parent, Lloyds Bank, into Australia on the same licence. The New Zealand Prime Minister, Mr Lange, discussed the bank’s case with the Prime Minister, Mr Hawke, when they were in Port Moresby for the Commonwealth Heads of Government regional meeting this month. America’s biggest bank, Citibank, also has strong claims through its Citicorp finance and merchant banking activities in Australia. The Martin review group, which examined the Austra-

lian financial system, suggested four to six new licences be granted in a one-off tender. The Labour Party decided at its July national conference that the Government should grant a limited number but did not set a limit. This leaves the way open for the Government to grant more than half a dozen licences if it wishes. The conference called on the Government to offer some new banking licences to local interests and to grant new licences only to applicants with capacity to provide new or expanded services. The Government was called on to make “every effort” to achieve a minimum 50 per cent Australian ownership in each new bank and to ensure the new licensees were insulated from any potential problem caused by their parent companies’ exposure to international debt.