The Reserve Bank has toughened the rules for financial companies wanting to apply for the Government's deposit guarantee scheme.
Governor Allan Bollard says implementing the scheme has brought to light policy issues that need addressing.
Finance firms with a credit rating of or below Double B, or don't have a credit rating, will have to pay a fee of 3%.
Newly-established financial institutions which wish to enter the scheme will have to be rated Triple B or better.
Financial advisor Chris Lee told Morning Report the rules mean the smallest finance companies will be able to survive, but won't be allowed to grow at the expense of a taxpayer guarantee.
Massey University banking centre director David Tripe says they will create a ring-fenced industry and there is a risk the Reserve Bank will find themselves managing a number of smaller institutions.
It means finance companies such as Marac and South Canterbury Finance will not pay a fee as they already have a credit rating.
The Reserve Bank is also limiting the potential for stripping money from finance companies through the use of dividends and payments to related parties.
The coverage has also been extended to non-resident depositors in New Zealand branches of overseas banks.
