On 13 May 2026, the Australian Prudential Regulation Authority (APRA) released for consultation a new draft licensing framework for locally-incorporated Authorised Deposit-taking Institutions (ADIs). Aside from the consultation paper, APRA has also released the draft ADI licensing framework for feedback, which comprises the ADI Licensing Criteria and ADI Licensing Guidelines.

Background

Consistent with APRA’s strategic objective of ‘getting the balance right’, APRA’s 2025-2026 Corporate Plan announced a key policy priority of simplifying APRA’s bank licensing framework. Simplifying the bank licensing process also implements Action 6 of the Council of Financial Regulator’s Review into Small and Medium-sized Banks. APRA also published a discussion paper last year proposing changes to the ADI licensing framework.

Key reforms

The proposed reforms include:

  • Replacing the existing licensing guidelines with clearer licensing criteria, which will be set out in a legislative instrument. The ADI Licensing Criteria will provide a more transparent set of requirements that applicants must demonstrate they meet before being authorised. All applicants will be subject to the new ADI Licensing Criteria when the legislative instrument comes into effect. This includes applicants that have applied under the existing framework.
  • The existing Restricted ADI pathway will be discontinued and all applicants will be subject to the same licensing criteria. While all applicants will face the same minimum licensing criteria, the licensing assessment will consider the size, scale, complexity, and risk of an applicant’s proposed business.
  • APRA implementing a 12-month period for an applicant to demonstrate that they meet the ADI Licensing Criteria, with an option for extension in exceptional circumstances. APRA will also extend its practice of publishing successful ADI licence applications to all ADI licensing decisions.

ADI Licensing Criteria

The ADI Licensing Criteria consists of authorisation criteria for a locally-incorporated ADI and a timeframe to demonstrate meeting the ADI Licensing Criteria. Supplementing the ADI Licensing Criteria is the ADI Licensing Guidelines which discuss requirements from legislation, regulations and APRA’s prudential standards. However, the ADI Licensing Guidelines do not form part of the law, create enforceable requirements or contain legal advice.

Next steps

The deadline for submissions on the consultation is 31 July 2026.

APRA intends to finalise amendments to the ADI licensing framework in late 2026.