Document ID: chunk:federal_register_of_legislation:F2022L01620:front:0:p19
Version: federal_register_of_legislation:F2022L01620
Segment Type: other
Provision Reference: 
Character Range: 48854–52388

the ADI in the absence of specific directions to do so from the person (other than miscellaneous items such as fees, expense reimbursements, taxes).
If all of these conditions are satisfied, an ADI may treat the funds as if they are from the person. An ADI must be able to demonstrate how this treatment satisfies the conditions outlined in this paragraph.

    36.         Retail deposits are divided into stable and less stable portions of funds, as described below.

    37.         Stable deposits are the portion of deposits that are fully covered by the Financial Claims Scheme (or an effective government deposit insurance scheme) where:
(a)          the depositor has other established relationships with the ADI that make deposit withdrawal highly unlikely; or
(b)          the deposits are in transactional accounts (e.g. accounts where salaries are automatically credited).

    38.         Less stable deposits are the portion of deposits that do not meet the requirements of stable deposits.

    39.         Certain types of deposits are considered more likely to be withdrawn in a time of stress. These include high-value deposits (i.e. deposits above any government deposit guarantee limit), deposits from customers who do not have established relationships with an ADI that would make the deposit withdrawal unlikely, deposits where the internet is integral to the design, marketing and usage of the account (on-line accounts) and deposits with promotional interest rates (heavily rate-driven).

    40.         An ADI must assess each less stable account or product balance against the following scorecard:

    Table 1 – The scorecard

Criteria                                                                                                                                                                             Score
Deposit balance is greater than any government deposit guarantee limit where it exists and, in its absence, where the deposit balance is greater than the equivalent of AUD 250,000  2
Deposit is an on-line account                                                                                                                                                        2
Absence of an established customer relationship                                                                                                                                      1
Deposit is heavily rate‑driven                                                                                                                                                       1

    The total score is then used to allocate the account or product deposit outflow as follows:

    Table 2 – Less stable deposit allocations

Score      Run-off rate
0 – 2      10 per cent
3 or more  25 per cent

Fixed‑term deposits

    41.         Cash outflows related to fixed or term deposits with a residual maturity or withdrawal notice period of greater than 30 days will be excluded from LCR calculations if the depositor has no legal right to withdraw deposits within the 30-day horizon of the LCR, or if early withdrawal results in a significant penalty that is materially greater than the loss of interest.

    42.         If an ADI allows a depositor to withdraw such deposits despite a clause that says the depositor has no legal right to withdraw, the entire category of these funds must be treated as demand deposits.

    43.         An ADI may allow depositors experiencing hardship to withdraw their term deposits without changing the