Mackay Chapman August 2025 APRA Update

In this month’s APRA update:

• APRA proposes a simpler, faster bank licensing framework
• Monthly Authorised Deposit-taking Institution statistics for June 2025
• RBA and APRA update their Memorandum of Understanding
• APRA announces update on macroprudential settings
• Consults on amendments to phase out AT1 capital
• APRA’s new operational risk rules take effect

Keep reading for more information and key details.

APRA proposes a simpler, faster bank licensing framework

APRA is aiming to make it easier and quicker for new banks and credit unions to get licensed. They’re updating the rules to provide clearer criteria and speed up decisions—applicants would have 12 months to meet requirements, and APRA would then make a public decision within three months.

They’re also reviewing the Restricted ADI (RADI) pathway, which hasn’t been widely used and may need changes to better support new entrants.

APRA wants to reduce unnecessary red tape while ensuring new banks are strong and sustainable. The goal is to boost competition and efficiency in the banking sector, aligning with recent regulator reviews focused on smaller banks.

Feedback on the proposals is open until 31 October 2025. More details are on APRA’s website.

APRA releases Monthly Authorised Deposit-taking Institution statistics for June 2025

APRA has published its latest Monthly Authorised Deposit-taking Institution Statistics (MADIS) report for June 2025. This report provides up-to-date data on the performance and financial health of banks, credit unions, and building societies operating in Australia.

The statistics cover key areas such as asset growth, capital adequacy, liquidity, and lending activities across the authorised deposit-taking institutions (ADIs). 

These insights help regulators, industry participants, and the public understand trends and developments within the banking sector.

You can access the full June 2025 MADIS report on APRA’s website here: Monthly Authorised Deposit-taking Institution Statistics.

RBA and APRA update their Memorandum of Understanding

APRA and the RBA have published an updated Memorandum of Understanding (MOU) to strengthen their cooperation and coordination in maintaining financial stability across Australia.

The updated MOU clearly outlines the roles and responsibilities of both agencies in supporting financial stability. It also sets out how they will consult, share information, and liaise on key areas including macroprudential policy, liquidity support, payments policy, and crisis management.

You can read the updated RBA-APRA MOU here: Memoranda of understanding and letters of arrangement.

APRA announces update on macroprudential settings

APRA will keep its macroprudential settings unchanged after reviewing current financial conditions. 

While borrowing conditions have eased with lower interest rates and tight labour markets, household debt and credit growth remain high. APRA is watching for risks like rising house prices and risky lending as borrowing increases.

To stay prepared, APRA plans to work with banks on tools like limits on high debt-to-income, investor, and interest-only loans if needed to protect financial stability. 
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Consults on amendments to phase out AT1 capital

APRA has started consulting on proposed changes to its bank prudential and reporting frameworks to phase out Additional Tier 1 (AT1) capital instruments.

Draft prudential standards, reporting standards, and practice guides are available on APRA’s website for review and feedback.

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APRA’s new operational risk rules take effect

Banks, insurers, and super funds now have to up their game on managing operational risks with APRA’s new CPS 230 rules. They need to figure out which services are critical, test their backup plans, and keep a close eye on key third-party providers.

With tech reliance growing and cyber threats on the rise, these rules help make sure financial services stay running even during big disruptions.

APRA’s Therese McCarthy Hockey says it’s all about protecting the community and making companies take responsibility for their partners. 

Smaller players get a bit more time to adjust, and everyone has to share who their main service providers are so APRA can keep tabs on risks across the board.

The contents of this article do not constitute legal advice and it is not intended to be a substitute for legal advice and should not be relied upon as such.  It is designed and intended as general information in summary form, current at the time of publication, for general informational purposes only.  You should seek legal advice or other professional advice in relation to any particular legal matters you or your organisation may have.