First, we should explain what an Authorised Deposit-Taking Institution (ADI) is. Financial Institutions in Australia are only authorised to accept deposits from the public if they are an ADI.
A Restricted Authorised Deposit-taking Institution (Restricted ADI or RADI) is an institution which operates under a specific licence granted by the Australian Prudential Regulatory Authority (APRA) – the body that governs the banking industry in Australia. The RADI license, among other things, limits the amount of money a RADI institution can hold in deposit at any given time.
This new licencing framework allows companies that wish to become a bank to seek a Restricted ADI licence before becoming a fully-fledged bank which would operate under an unrestricted ADI license.
The Australian Government implemented this licensing framework in an effort to increase and drive competition in the Australian banking sector.
It allows Alex to develop our capabilities and build our products with the goal of becoming an unrestricted Authorised Deposit-taking Institution (ADI) within a maximum period of 2 years.
The same rules apply as for all banks in Australia. All our customers’ deposits are protected under the Financial Claims Scheme (FCS) up to the value of $250,000.
Alex has applied for a RADI license and intends to conduct banking business once we receive our license.