Provisions of the Banking Act 1959 for the protection of depositors generally do not apply to foreign ADIs, including INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED. For example, depositors with foreign ADIs do not receive the benefit of the following protections:
o Deposits are not covered by the financial claims scheme and are not guaranteed by the Australian Government.
o Deposits do not receive priority ahead of amounts owed to other creditors. This means that if a foreign ADI were unable to meet its obligations or otherwise is in financial difficulties and ceases to make payments, its depositors in Australia would not receive priority for repayment of their deposits from the foreign ADI’s assets in Australia.
o A foreign ADI is not required to hold assets in Australia to cover its deposit liabilities in Australia.
This means that if the foreign ADI were unable to meet its obligations or otherwise is in financial difficulty and ceases to make payments, it is uncertain whether depositors would be able to access the full amount of their deposit.