CANBERRA ADVANCE BANK LIMITED (MERGER) BILL
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [9.36]: I move:
I seek leave to have the second reading speech incorporated in Hansard.
That this bill be now read a second time.
The purpose of this legislation is to give statutory effect to the merger of the Canberra Advance Bank Limited with the Advance Bank Limited.
Whilst the activities of Canberra Advance Bank are principally located within the Australian Capital Territory, Canberra Advance Bank conducts business through a number of branches located in New South Wales. This includes lending in respect of property located within the State.
Canberra Advance Bank is a wholly owned subsidiary of the Advance Bank having been created in 1986 following conversion of the Civic Co-operative Permanent Building Society to corporate status. It is a condition of Canberra Advance Bank's banking licence that its banking business be rationalised into that of the Advance Bank within 5 years of its formation. That period was extended following the merger of the building society operations of Canberra Permanent Co-operative Building Society Limited with the banking business of Canberra Advance Bank and as a result it is now proposed that integration occur no later than 1st June, 1992.
It is therefore essential to integrate the banking assets and liabilities of Canberra Advance Bank into the Advance Bank by 1st June, 1992 in accordance with the Reserve Bank's requirement that the Advance Bank is to have only one banking licence, instead of two, by that date.
The Australian Capital Territory Government has agreed to submit "foundation" legislation into the Australian Capital Territory Parliament. The Australian Capital Territory Bill and the New South Wales Bill may proceed independently because each Bill commences on a later appointed day.
The reason for proceeding along a legislative path is simply for administrative ease in completing the transactions. There is no doubt that the merger could be effected without legislation. However, that would involve separate transactions of each customer or other person who has contractual or other business relationships with the Canberra Advance Bank.
In the absence of legislation it would be necessary to contact each of these customers to obtain an authority to transfer accounts from one bank to the other, new mandates for the operation of a variety of types of accounts, new authorities for periodical payments and new indemnities for various purposes connected with the accounts.
In addition, mortgage securities held from customers and guarantors would have to be transferred from one bank to another and in some cases it would be necessary to obtain fresh security documents from the customers and their sureties.
Such procedures would be very tedious for customers who would be required to read explanatory material and return various forms to the Advance Bank. It is quite inconceivable that all customers would respond. It would be physically impossible to achieve this by 1st June, 1992.
The work involved in the preparation of documents, contacting the parties and obtaining signatures and attending to stamping, and, where necessary, registration would be totally unproductive and would only occupy bank staff for many months at the expense of and with delay to new transactions.
There would also be considerable workload imposed upon the officers of the Office of State Revenue and the Land Titles Office because of the large number of securities involved.
This legislation will, therefore, avoid the considerable inconvenience which would otherwise be imposed on the public - as bank customers, businesses dealing with the banks, the staff of the banks and the Government. While minimising the extent of paperwork involved, the legislation ensures the protection of the interests of customers and other persons with whom the banks have dealing. The bill is consistent with the Government's objectives of encouraging and assisting business activities in New South Wales and removing bureaucratic obstacles wherever possible.
The legislation before the House is similar in concept to previous merger Acts especially the procedures which were followed last year in connection with the merger of the ANZ Bank and the National Mutual Royal Bank.
I commend the bill.
The Hon. M. R. EGAN (Leader of the Opposition) [9.37]: Notwithstanding the fact that Advance Bank Australia Limited lacked the courtesy to approach the shadow minister for finance in this State to brief him on the need for this bill, the Opposition supports the bill.
The Hon. R. S. L. JONES [9.38]: Notwithstanding the fact that the Australian Democrats were not consulted about this bill before it came to this House, we also support it.
Reverend the Hon. F. J. NILE [9.38]: Call to Australia is pleased to support the Canberra Advance Bank (Merger) Bill.
The Hon. E. P. PICKERING (Minister for Police and Emergency Services and Vice-President of the Executive Council) [9.39], in reply: I note the enthusiastic support for the bill, which I commend to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.
As I indicated earlier there is an urgent need for passage of this legislation so that the banking authorities held by Canberra Advance Bank can be returned by the 1st June, 1992.