New South Wales Consolidated Acts

STATE BANK (CORPORATISATION) ACT 1989 - SECT 12

12 Government guarantees

(1) Until a day to be appointed by the Governor by proclamation for the purposes of this section, the payment of all money due by the Corporation is guaranteed by the Government of New South Wales.

(2) On and from the day appointed under subsection (1), the guarantee created by that subsection ceases, except in relation to:

(a) money standing to the credit of current accounts with the Corporation immediately before that day, and

(b) term deposits made with the State Bank or the Corporation, or other term liabilities incurred by the State Bank or the Corporation, before that day, and

(c) securities issued by the State Bank or the Corporation before that day, and

(d) money that becomes due by the Corporation on or after that day on account of a renewal or roll-over of special capital notes issued by the State Bank or the Corporation before that day (being special capital notes that were the subject of a special arrangement under section 21A of the State Bank Act 1981 or section 8 of this Act), and

(e) (without limiting the above) contracts, agreements or arrangements entered into by the State Bank or the Corporation before that day.

(2A) On and from the third anniversary of the day appointed under subsection (1), the guarantee created by that subsection in relation to the matters listed in subsection (2) ceases, except in relation to:

(a) any financial accommodation provided to the Corporation (other than demand deposits) that is required by any applicable accounting standards or principles to be recorded as a liability on the balance sheet of the Corporation, and

(b) retail deposits (other than demand deposits), and

(c) any financial commitments of the Corporation that are not required by any applicable accounting standards or principles to be recorded as a liability on the balance sheet of the Corporation, including guarantees, assets sold with recourse, standby letters of credit, bill endorsements and written put options, documentary letters of credit and performance related contingencies, sale and repurchase agreements, outright forward purchases and forward deposits, and underwriting facilities, and

(d) any forward exchange contracts, hedge contracts, currency swap agreements, currency futures agreements, currency options, forward rate agreements, interest rate swap agreements, interest rate futures agreements, interest rate options agreements, gold contracts, gold futures contracts, gold options, stock price futures agreements, stock price options, spot foreign exchange transactions, basis swap transactions, interest rate caps, collar or floor transactions, or cross-currency rate swap transactions, and

(e) any liabilities, other than contingent liabilities, if a claim or demand is made on the Government of New South Wales in respect of any such liability before the third anniversary of the day appointed under subsection (1).

(2B) The guarantee of any liability that continues after the third anniversary of the day appointed under subsection (1) pursuant to subsection (2A) ceases immediately if:

(a) the terms or conditions of the arrangements giving rise to the relevant liability are amended or varied, or

(b) any right to extend the relevant liability is exercised by the Bank,

unless the Treasurer agrees in writing that the guarantee is to continue despite any such amendment, variation or extension. Any agreement may be given in respect of particular amendments, variations or extensions or in respect of any class of amendments, variations or extensions.

(3) The payment of any money due by a subsidiary of the Corporation is not guaranteed under this section.