APRA Regulation: Why It Matters for Your Savings

Who Is APRA?

The Australian Prudential Regulation Authority (APRA) is the independent government body responsible for supervising banks, credit unions, building societies, and insurance companies in Australia.

APRA's Role in Protecting Depositors

APRA ensures financial institutions:

• Maintain adequate capital: Banks must hold sufficient reserves
• Manage risks prudently: Strict risk management requirements
• Operate sustainably: Long-term viability assessments
• Report transparently: Regular disclosure requirements

Capital Requirements

APRA requires Australian ADIs to maintain capital ratios well above international minimums:

• Common Equity Tier 1: Minimum 10.5% (vs 4.5% international)
• Total Capital: Must exceed 8% of risk-weighted assets
• Buffer Requirements: Additional buffers for major banks

How to Verify APRA Authorisation

Before depositing funds, verify the institution is APRA-authorised:

1. Visit the APRA website (apra.gov.au)
2. Search the register of authorised ADIs
3. Confirm the exact legal name matches
4. Check for any licence conditions

Why Non-APRA Institutions Are Risky

Deposits with non-APRA institutions:

• Are NOT covered by the government guarantee
• Have no regulatory capital requirements
• May operate with minimal oversight
• Offer no automatic compensation if they fail

Australia's Banking System Strength

Thanks to APRA's regulation, Australian banks are among the safest in the world. No depositor has ever lost money in an APRA-regulated institution in Australia's modern banking history.

Always verify APRA authorisation before opening any deposit account.