Reserve Bank of Australia Annual Report – 1995 Financial Statements Contingent Liabilities and Other Items not included in the Balance Sheet

Note 10 Contingent Liabilities and Other Items not included in the Balance Sheet

Contingencies

The Bank has a contingent liability, amounting to $76.4 million at 30 June 1995 ($74.5 million at 30 June 1994), in respect of the uncalled portion of its shares held in the Bank for International Settlements.

In the course of providing banking services to its customers, the Bank provides performance guarantees to third parties in relation to customer activities. Such exposure is not material and has not given rise to losses in the past.

Other items

The Reserve Bank is a defendant in civil litigation arising from the collapse of some financial institutions in Victoria; in civil litigation relating to a loss allegedly suffered by a firm over the issue of the new series currency notes; in civil litigation in respect of an alleged debt by the Bank due to a company for energy savings; and in four common law matters. In addition, the Bank is an appellant in a case regarding a payroll tax assessment and the plaintiff in a case involving delivery of printing machinery. All will be defended, and none is judged likely to have a materially adverse effect on the activities, financial condition or operating results of the Bank.

In keeping with Commonwealth Government policy, the Bank carries its own insurance risks except where administrative costs are estimated to be excessive. Experience with self insurance claims is as follows:

	Number of Claims
	1993/94	1994/95
0 – $10,000	22	4
$10,001 – $20,000	–	1
$20,001 – $30,000	1	–
$30,001 – $40,000	–	2