Reserve Bank Act 1959

The Act primarily binds the Bank itself and the people who hold office in or are employed by it. It also reaches anyone whose conduct intersects with note issuance (Part V), the Bank's secrecy regime (section 79A and section 79B), or its central banking function (Part IV). The Treasurer is the Minister administering the Act under section 5(1) and exercises significant appointment, termination, and direction powers throughout. The Secretary of the Department sits ex officio on the Monetary Policy Board (section 25AA(c)) and is required by section 13 to maintain a close liaison with the Governor.

External Board members must not, while in office, be staff of the Reserve Bank Service, persons appointed or engaged under the Public Service Act 1999, or directors, officers, or employees of an ADI (sections 25AB(2), 25NB(2)). That eligibility line filters who, in the financial sector, can be appointed.

The Bank must perform its functions in a way that achieves its overarching objective (section 8AA(2)), subject to any other Commonwealth law conferring functions on it (section 8AA(3)). The Bank must act as banker and financial agent of the Commonwealth in so far as the Commonwealth requires it (section 27), and shall not carry on business otherwise than as a central bank (section 26(c)). The Payments System Board must, after 30 June each year, prepare and give to the Minister a report describing standards determined under section 827D of the Corporations Act 2001 during the year, variations and revocations of those standards, and developments in the clearing and settlement industry relevant to financial stability (section 25M).

Internal duties on Board members include: making an oath or affirmation of allegiance and a declaration of secrecy before first acting as a member (sections 25AJ, 25E, 25NJ); acting in an independent and impartial manner with complete discretion and without direction (sections 25AK, 25EA, 25NK); disclosing material personal interests under sections 7D and 7E; and, for the Governance Board, holding at least four meetings a year (section 25NN(2)). The Governor is responsible for day-to-day management of the Bank and must fulfil that role consistently with Division 3 of Part II (section 12(2)).

Beyond the general powers in section 8, the statute confers a series of decision powers. The Treasurer appoints and may terminate the Governor and Deputy Governor (section 24, section 25), external Monetary Policy Board members (sections 25AB, 25AM), external Governance Board members (sections 25NB, 25NM), and external Payments System Board members (sections 25B, 25L). The Bank may issue, re-issue, and cancel Australian notes (section 34) and may determine new note denominations by legislative instrument (section 35). The Bank may establish branches and agencies anywhere in Australia or overseas (section 75), appoint attorneys (section 76), and determine the terms of staff appointments and engagements (sections 67 and 68). The Governance Board may transfer sums from the Reserve Bank Reserve Fund to the Bank's capital (section 29(2)). The Treasurer, after consulting the Governance Board, determines the amounts of net profit set aside for contingencies, placed to the Reserve Fund, and remitted to the Commonwealth (section 30).

Two override mechanisms sit on top of these powers. Under section 11, where the Treasurer and a Board cannot reach agreement on whether a Board's policy is directed to the greatest advantage of the people of Australia, the Treasurer may submit a recommendation to the Governor-General, who, acting on Federal Executive Council advice, may by order determine the policy to be adopted by the Bank. The Treasurer must table the order, the Government statement, and the Board's statement within 15 sitting days of each House (section 11(7)). The Treasurer may also, by legislative instrument, declare that the Act ceases to extend to a specified external Territory (section 6A).

Part V criminalises private note issue. Under section 44(1), a person must not issue a bill or note for the payment of money payable to bearer on demand and intended for circulation. The penalty is 50 penalty units. The Criminal Code applies to all offences against the Act under section 6B.

The strongest penalty in the Act sits in the secrecy regime. Section 79A(2) prohibits a person who is or has been an officer (broadly defined to capture Board members, RBS staff, ABS staff, and others who acquire protected information) from disclosing protected information or producing protected documents except for the purposes of this Act and the listed cognate statutes. The penalty is imprisonment for 2 years. Section 79A(7C) imposes the same 2-year penalty on a person who fails to comply with conditions imposed under section 79A(7A) when information was disclosed to them. Section 79B(1) creates a lower-tier secrecy offence carrying 1 penalty unit. Note 1 to section 79A(2) relies on subsection 4B(2) of the Crimes Act 1914 to allow a fine to be imposed instead of, or in addition to, imprisonment.

Section 89 caps regulation-making penalties at 10 penalty units. The Bank's protection from liability for crisis-related actions sits in section 84A: criminal and civil actions do not lie against the Bank, the Governor, the Deputy Governor, Board members, RBS staff, and seconded officers in respect of acts or omissions done in good faith for the purpose of performing functions under section 823F of the Corporations Act 2001 or Parts 7.3 and 7.3B of that Act, where it is reasonable to do or omit the thing for that purpose.

Appointment terms are tightly bounded. The Governor and Deputy Governor are appointed for periods not exceeding 7 years and are eligible for reappointment (section 24(1)(b)). External Monetary Policy Board members hold office for periods specified in their instrument of appointment, not exceeding 5 years per term, with a 7-year cap on cumulative tenure (section 25AD). External Governance Board members are subject to the same 5-year and 7-year limits (section 25ND). External Payments System Board members are appointed for periods not exceeding 5 years (section 25B(3)).

Quorum and voting rules differ by Board. The Monetary Policy Board's quorum is five members (section 25AQ), with the chair holding both a deliberative and casting vote (section 25AR). The Payments System Board's quorum is also five (section 25F(3)), again with deliberative and casting votes for the chair (section 25F(5)). The Governance Board has a higher quorum of seven (section 25NR(1)), with a fall-back rule that preserves a quorum where members must withdraw because of section 25NP exclusions or PGPA Act conflict rules. Each Board may make decisions without meeting where the conditions of sections 25AU, 25H, or 25NU are met. Section 25NP forbids the Governor, Deputy Governor, or senior RBS member from participating in Governance Board deliberations on the Governor or Deputy Governor's terms of office.

The Payments System Board's annual report under section 25M is the most concrete reporting cadence in the Act. Section 25M(2) explicitly disapplies section 34C of the Acts Interpretation Act 1901 to that report.

This Act sits at the centre of a network of Commonwealth statutes. The Banking Act 1959 governs ADIs and is referenced in section 26(c), section 79A, and section 86 (priority of debts due to the Bank by an ADI in winding-up). The Payment Systems (Regulation) Act 1998 and the Payment Systems and Netting Act 1998 supply the substantive payments regulation powers exercised by the Payments System Board through section 10B. Parts 7.3 and 7.3B of the Corporations Act 2001 confer the Bank's clearing and settlement licensing and crisis-resolution functions, also routed through section 10B. Section 84A creates an immunity around acts done under section 823F and Parts 7.3 and 7.3B of the Corporations Act 2001. Section 79A's protected information definition explicitly captures information from each of those cognate statutes.

The Act also engages structural Commonwealth law. The Public Governance, Performance and Accountability Act 2013 applies subject to the carve-outs in section 7B and the modifications in sections 7D, 7E, and 7F. The Acts Interpretation Act 1901 supplies acting appointment and meeting-conduct rules referenced throughout (sections 33A, 33AA, 33AB, 33B). The Australian Prudential Regulation Authority Act 1998 supplies the definitions of APRA member and APRA staff member used by section 5. The Remuneration Tribunal Act 1973 controls remuneration of external Board members. The Currency Act 1965 supports the section 36 conversion table for legal tender denominations. The Crimes Act 1914 (subsection 4B(2)) supports fines as alternative or additional punishment for indictable offences. The Australian Securities and Investments Commission Act 2001 (subsection 127(2A)) governs ASIC disclosures to the Bank and is preserved by section 79A(9A). The Freedom of Information Act 1982 carves out protected documents under section 79A(9). Subsection 9B(3) and equivalents make each operational Board defer to the Governance Board's accountable-authority duties under the PGPA Act.

The repealed-Acts list in section 4(1) removes the Commonwealth Bank Acts of 1945, 1948, 1951, and 1953, but section 4(2) preserves operation of any amendment those Acts made to other Acts. Section 87 deems the validity of an act or transaction of the Bank not to be called in question on the ground that any provision of the Act has not been complied with: this is a strong privative-style clause that limits collateral attack. Section 86 gives the Bank priority over all other debts in the winding-up of an ADI, subject to subsection 13A(3) of the Banking Act 1959.

Section 79A's protected-information definition is broad but carries a key carve-out at the end of subsections (1) and (2): information that has already been lawfully made available to the public from other sources is not protected. The default secrecy duty in section 79A(2) does not, however, prohibit disclosures to financial sector supervisory agencies, foreign central banks, statutory managers under Part 7.3B of the Corporations Act 2001, persons or bodies prescribed by regulation, or persons or bodies approved in writing by the Governor (section 79A(4) and (5)). The Governor may delegate that approval power to the Deputy Governor or an Assistant Governor (section 79A(5B)).

Section 11 has not been used in living memory but remains active law: a public order under section 11 must be tabled within 15 sitting days. Section 6A still allows the Treasurer to remove the Act's application to a specified external Territory. Section 13's mandatory liaison between the Governor and Secretary is unusually strong wording. Section 79 makes the Bank free of state and territory taxation but does not exempt it from Commonwealth taxation save for income tax.

A retail acquirer challenging a Reserve Bank designation or interchange-fee standard under the Payment Systems (Regulation) Act 1998 will need to read section 10B of this Act in tandem with section 8 of the PSR Act, because both supply the opinions the Bank must form before acting. The Federal Court has read the two sections together in Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707 (paragraph 503) and in Visa International Service Association v Reserve Bank of Australia [2003] FCA 977 (paragraphs 597 to 598).

A litigant seeking to rely on RBA statistical publications must work through section 85A. Australian Competition and Consumer Commission v Mastercard Asia/Pacific Pte Ltd [2024] FCA 999 (paragraphs 44 to 49) and the leave application in Mastercard Asia/Pacific Pte Ltd v Australian Competition and Consumer Commission [2024] FCA 1237 (paragraphs 3 to 9) discuss how section 85A interacts with the doctrine of judicial notice and the boundary of "statistical information".

A current or former officer asked to give evidence about a regulated entity's affairs must read section 79A carefully: subsection (8) blocks compulsion to disclose protected information in court except when necessary for this Act, the Banking Act 1959, the Payment Systems (Regulation) Act 1998, the Payment Systems and Netting Act 1998, the listed Corporations Act parts, or the repealed Banks (Shareholdings) Act 1972. A counterparty seeking to enforce a debt against an ADI in winding-up will be subordinated to any debt owed by that ADI to the Reserve Bank under section 86.