Authorised Deposit-Taking Institution

Financial institutions in Australia are only permitted to accept deposits from the public if they are Authorised Deposit-taking Institutions (ADIs). The ADI’s authority is granted by the Australian Prudential Regulation Authority (APRA) under the Banking Act 1959 (Cth).[1]

The term was adopted to formalise the right of non-bank financial institutions — such as building societies, credit unions and friendly societies — to accept such deposits. All ADIs are subject to the same prudential standards as banks but for a corporation to use word ‘bank’, ‘building society’ and ‘credit union’ in its name, it must meet certain requirements.

The concept of an ADI replaced that of “bank” following the recommendations of the Wallis Report in March 1997.[2]

The statutory requirements of an ADI are elucidated in case Commissioners of the State Savings Bank of Victoria v Permewan, Wright & Co Ltd (1914).[3] The case was seminal in characterising essential elements of a bank as being the collection of money by receiving deposits upon loan, repayable when and as expressly or impliedly agreed upon, and the utilisation of the money by lending it again in such sums as are required. If this is the institution’s real and substantial business, and not merely an ancillary or incidental branch of another business, they are deemed to be a bank.

Restricted ADI

On 4 May 2018, APRA created a Restricted ADI (RADI) framework[4][5] to assist potential new entrants to the banking industry, particularly small firms with limited financial resources, to navigate the licensing process. Eligible entities can conduct a limited range of business activities for two years. On 7 May 2018, APRA issued the first RADI to Volt Bank.[6]


  1. ^APRA, ” List of Authorised Deposit-taking Institutions ” Archived 2014-07-30 at the Wayback Machine, APRA, November 2017
  2. ^Alan L Tyree (2000). “The Australian Payments System”. Banking and Finance Law Review. Archived from the original on 2012-04-07. Retrieved 2012-03-20.
  3. ^[1914] HCA 83
  4. ^“APRA finalises new Restricted Authorised Deposit-taking Institution licensing framework”. APRA. 4 May 2018.
  5. ^Dodd, Jo; Lauer, Marina; Wong, Ashley. “New banks, new rules: APRA updates ADI licensing regime”. KWM. Retrieved 16 May 2018.
  6. ^“APRA authorises Restricted ADI”. APRA. Retrieved 7 October 2018.