New Zealand banking is unique in the sense that about a million people opted for Internet banking, which is 25% of the population. Its banking is dominated by foreign presence especially Australia and UK but it is competitive. In terms of asset quality, profitability and capital base, New Zealand banking is rated very high. Its central bank follows a three-pronged strategy of self-discipline, market discipline and supervisory discipline while regulating banks. The cooperate governance standards are fairly satisfactory. The Reserve Bank holds the view that the present system of absence of deposit insurance scheme has to be continued and the cost of bank failure, if any, should be borne by the various stakeholders proportionate to the risk perceptions and not by the exchequer. The banking system faces challenges in the form of excessive reliance on wholesale market and foreign sources for funding rather than domestic savers, besides the risk of not all that well diversified presence of foreign banks.

New Zealand is a two-island nation of about four million citizens, with a unique international flavor and a penchant for recognizing commercial opportunities. It has low or no import duties and it plans to eliminate most tariffs by 2005.

Like Australia, New Zealand has a strong and stable democracy and its business practices are similar to those in the United States. The United States is New Zealand's third largest export destination and third largest source of imports, behind Australia and European Union. It offers business opportunities in areas like information and communication technology, franchising and tourism.

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