Non-Bank Entity Joins NZ's Exchange Settlement Account System

The Reserve Bank of New Zealand (RBNZ) has approved the first non-bank member to its Exchange Settlement Account System (ESAS). The Nelson Building Society, a non-bank deposit taker, is now operational in ESAS after system testing and onboarding. This move follows a review by RBNZ, which previously did not support non-bank entities obtaining an ESAS account.

ESAS is one of two wholesale financial market infrastructures operated by the RBNZ, and all payments between financial institutions must first settle in ESAS before reaching their destination. According to FMI&S Director Steve Gordon, 'ESAS membership now allows approved non-bank entities to settle payments directly in risk-free central bank money without using a commercial bank as an intermediary.'

The RBNZ has not disclosed the names of other entities applying to become ESAS members.