The Australian Prudential Regulation Authority (APRA) has finalised a licensing framework for locally incorporated authorised deposit-taking institutions (ADIs), replacing expectations set out in guidance with legally effective minimum criteria and consolidating two licensing pathways into one. The framework takes effect immediately. It follows the May 2026 consultation and implements the licensing reform commitment under the Council of Financial Regulators’ Review into Small and Medium-sized Banks. All applicants must meet the minimum criteria, but assessment expectations and evidence requirements will reflect their business model, risk profile, size and complexity.
Applicants will have up to 12 months from lodging a formal application and paying the application fee to demonstrate that they meet the criteria. Extensions may be available in exceptional circumstances, including delays outside an applicant’s control. Once APRA determines that an application is substantially complete, it will aim to make a licensing decision within 90 days. Decisions to grant or refuse licences will be published, but refusal reasons and applications withdrawn before a decision will not be disclosed.
The single pathway will replace the Restricted ADI pathway introduced in 2018, which experienced limited uptake and difficulties transitioning applicants to full licences. Applicants must be operationally ready to offer at least one product that generates revenue, rather than demonstrate readiness for products outside their proposed business model at launch. APRA is working with applicants that have already lodged formal applications to transition them without disadvantage.