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Between 1940 and 1959, central banking business was the responsibility of the Commonwealth Bank. The Reserve Bank Act 1959 established the Reserve Bank of Australia as the central bank, and from 1959 to 1998 the Reserve Bank was responsible for the supervision of commercial banks. From 1 July 1998, the (APRA) assumed responsibility for bank supervision while the Reserve Bank retains responsibility for monetary policy and the maintenance of financial stability, including stability of the payments system.

Banks are the largest deposit-taking and financial institutions in Australia. At the end of June 2001 there were 50 banks operating in Australia. All are authorised to operate by the Banking Act 1959. Four major banks: the Australia and New Zealand Banking Group, National Australia Bank, Westpac Banking Corporation and the Commonwealth Bank of Australia, account for over half the total assets of all banks. These four banks provide widespread banking services and an extensive retail branch network throughout Australia. The remaining banks provide similar banking services through limited branch networks often located in particular regions. As at 30 June 2000, banks operated: 5,003 branches of which 2,838 were in metropolitan areas and 2,165 elsewhere; and 5,043 agencies of which 2,091 were in metropolitan areas and 2,952 elsewhere. As at 30 June 2001, banking services were provided at 2,821 giroPost locations and 11,915 Automatic Teller Machines (ATM) throughout Australia.

The liabilities and financial assets of the Reserve Bank are set out in table 26.3. The liabilities and financial assets of the banks operating in Australia are shown in table 26.4.