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In banking, the term national bank carries several meanings:
- especially in developing countries, a bank owned by the state
- an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally)
- in the United States, an ordinary private bank operating within a specific regulatory structure, which may or may not operate nationally, under the supervision of the Office of the Comptroller of the Currency.
In the past, the term "national bank" has been used synonymously with "central bank", but it is no longer used in this sense today. Some central banks may have the words "National Bank" in their name; conversely if a bank is named in this way, it is not automatically considered a central bank. For example, National-Bank AG in Essen, Germany is a privately owned commercial bank, just like National Bank of Canada of Montreal, Canada. On the other side, National Bank of Ethiopia is the central bank of Ethiopia and National Bank of Cambodia is the central bank of Cambodia.
The Commonwealth Bank of Australia was founded by an Australian Act of Parliament in 1911. Bank Nationalisation was the policy of the Andrew Fisher Labor Government. In a rare move for the time, the bank was to have both savings and general bank business. The bank was also the first bank in Australia to receive a Federal Government guarantee.
In 1958 and 1959, there was a controversy concerning the dual function of the bank as the central bank on the one hand and a general bank on the other. As a result of this, the bank was split, giving the reserve bank function to the Reserve Bank of Australia and the general bank function to the Commonwealth Banking Corporation.
The Commonwealth bank was privatised in the 1990s by the Keating Labor government. At present it is the second largest bank in Australia, after the National Australia Bank which has always been privately owned.
The national bank in Chile is BancoEstado. It was created in 1953 by merging several state-owned financial institutions. The bank operates in competition with private banks but in addition to profitability its goals include having a positive social impact.
The National Bank for Agriculture and Rural Development (NABARD) is an Indian government development bank that was established on 18 July 1981 to implement the National Bank for Agriculture and Rural Development Act 1981.
National Bank of Kenya is a commercial bank founded in 1968. Its shares are listed on the Nairobi Stock Exchange and are majority owned (70%) jointly by the Government of Kenya and by the state owned National Social Security Fund of Kenya.
The New Zealand government formerly owned two other banks in New Zealand: The Bank of New Zealand, from 1945 to 1992 when it was privatised and sold, and Post Office Savings Bank, which was created as a separate entity with the privatisation of New Zealand Post. PostBank was sold to ANZ New Zealand in 1989.
National Bank of New Zealand
In the United States, the term "national bank" originally referred to the revolutionary era Bank of North America, later, First Bank of the United States, or its successor the Second Bank of the United States. All are now defunct.
In the modern U.S. the term "national bank" has a precise meaning: a banking institution chartered and supervised by the Office of the Comptroller of the Currency ("OCC"), an agency in the U.S. Treasury Department, pursuant to the National Bank Act. The inclusion of the word "National" in the bank's name or the designation "National Association" or its abbreviation "N.A." is a required part of the distinguishing legal title of a national bank, as in "Citibank, N.A." Many "state banks", by contrast, are chartered by the applicable state government (usually the state's department of banking). The Federal Deposit Insurance Corporation (FDIC) insures deposits at both national and state banks.
The advantage of a National Bank Act charter is that a national bank is not subject to state usury laws intended to prevent predatory lending. (However, see also Cuomo v. Clearing House Association, L. L. C., stating that federal banking regulations do not preempt the ability of states to enforce their own fair-lending laws.) There is currently no federal cap on rates. The federal government only requires that whatever rates, fees or terms are set by issuers be disclosed to the consumer in accordance with the Truth in Lending Act.
Notwithstanding the name, not all "national banks" have nationwide operations. Some "national banks" have operations in only one city, county, or state. "National banks" should also be distinguished from federal savings associations (which include federal savings and loans, and federal savings banks, FSB), which are financial institutions chartered by the Office of Thrift Supervision, another agency in the U.S. Treasury Department which was dismembered by the 112th Congress and merged with the Office of the Comptroller of the Currency on July 21, 2011. The Federal Reserve is the United States' central bank.
- Audited December 2012 Financial Report
- 70% Shareholding In National Bank of Kenya Is Jointly Owned By The Government and Kenya NSSF
- Beneficial National Bank v. Anderson, 539 U.S. 1 (2003).
- Cuomo v. Clearing House Association, L. L. C., 557 U.S. ___ (Supreme Court of the United States 2009).