The last licence it gave was in 2017
The Reserve Bank of New Zealand (RBNZ) has granted its first non-bank deposit-taker licence in several years to finance company Welcome, as reported in an article by RNZ.com.
With the licence, Welcome CEO Anton Douglas said that the firm will be able to provide services such as higher deposit rates in comparison to banks and more certainty of returns. It also offers flexible mortgage solutions as well as better protection than mortgage funds and unregulated alternatives.
“As a licensed non-bank deposit taker, the Reserve Bank requires Welcome to maintain a minimum level of capital in the business, providing peace of mind for depositors. It’s a real point of difference when comparing Welcome to some other investment options,” said Douglas.
Douglas said that Welcome is focused on catering to the needs of certain borrowers.
“Our aim is to meet the needs of borrowers who don't fit into rigid bank protocols or don't get an answer quickly enough to move on an opportunity,” he said.
As it is now a licensed non-bank deposit taker, Welcome can be eligible under the Depositor Compensation Scheme from the Deposit Takers Act 2023, which will allow it to provide a government guarantee of up to $100,000 per depositor per provider once the scheme takes into effect some time in 2025.
Tracey Jones, Welcome’s chair and independent director, said that the new Deposit Takers Act and the upcoming regulatory updates will secure even more protection and transparency to investors.
“We are excited about the added protections and confidence this new regulatory environment will provide to investors. When the scheme commences, our investors can expect that qualifying deposits of up to $100,000 will be guaranteed by the government, which helps to grow trust in New Zealand’s financial sector,” said Jones.
The last time the RBNZ has issued a non-bank deposit taker licence was to financial institution Christian Savings in 2017.
