Draft laws to underpin the federal government's bank guarantee scheme have passed federal parliament.
Originally, the government had thought legislation was not required to implement the schemes that give an unlimited guarantee on deposits and wholesale funding.
But the government later decided to rush through a bill legislating for an appropriation.
From Friday November 28, the government will guarantee the first $1 million deposited with an Australian-incorporated bank, a credit union or a building society free of charge.
Larger deposits will attract a fee, as will deposits from residents with a foreign bank branch in Australia.
From the same date, short-term and long-term wholesale funding for Australian-incorporated banks, building societies and credit unions, and short-term funding for foreign bank branches raised from Australian residents, will be eligible for the guarantee, for a fee.
The guarantee will apply to short-term liabilities such as bank bills, certificates of deposit, commercial paper and certain debentures with initial maturities of up to 15 months.
The guarantee will also apply to long-term liabilities such as bonds, notes and certain debentures with terms of maturity of 15 to 60 months.
The wholesale funding guarantee will apply to these instruments whether they are offered domestically or in international markets.
The Australian Greens attempted but failed to amend the bill to include a sunset clause and increased parliamentary accountability.