Unauthorised banking businesses granted injunction

The Australian Prudential Regulation Authority (APRA) first lodged an application in the Federal Court on 29 September 2023 seeking to restrain Robert Bruce Gray from operating and marketing businesses he described as “banks”.

Mr Gray’s alleged businesses included Commercial Development Bank and Creditnet Bank Internationale, which were not authorised to carry on a banking business.

The decision was handed down on 13 February, with Justice Shariff ordering Mr Gray to be permanently restrained from:

• Carrying on any banking business in Australia.
• Assuming or using the word “bank”, or any similar words, in relation to any purported bank, business or purported business.
• Advertising, representing, or stating that any purported bank, business, or purported business will carry on banking business.

Additionally, Mr Gray has been ordered to pay for APRA’s costs of the proceedings.

Only authorised deposit-taking institutions (ADIs) that have been licensed by APRA are allowed to carry on banking businesses in Australia, which includes referring to themselves as “banks” or describing their services as “banking services” under the Banking Act 1959.

Allegedly, Mr Gray (who had not participated in the proceedings), ignored APRA’s requests to stop using the term “bank” in relation to his businesses and to cease carrying on any unauthorised banking business.

APRA deputy chair Margaret Cole has urged consumers to be alert and research any unfamiliar businesses describing themselves as banks before depositing money.

“APRA protects bank depositors through its licensing regime, prudential framework, and active supervision.

“We have taken action once again to prevent Australians mistakenly believing they are depositing money with an APRA-regulated entity and receiving the same protections.

“We will continue to hold entities and individuals to account to ensure that Australians’ financial interests are safe,” Ms Cole said.

Consumers are able to check a list of all APRA-regulated ADIs via the regulator’s register of ADIs, or they can contact APRA directly.

According to APRA, this is now the second case which it has successfully taken court action to stop an individual from carrying on an unauthorised banking business.

In July last year, APRA welcomed the Federal Court’s decision granting an injunction on Andrew Morton Garrett for the same reason as Mr Gray. Mr Garrett’s purported businesses at the time included Dynamic Capital Bank, Banque de Capital Dynamique, and Banca Di Como.

[RELATED: APRA takes action against ‘unauthorised’ bank]