The Reserve Bank of New Zealand is pressing for the power of veto over significant purchases by the country's banks.

The central bank, which regulates lenders, is calling for submissions on a consultation document that proposes requiring lenders to get a notice of non-objection from the Reserve Bank when undertaking a significant acquisition.

The policy would give the central bank oversight of deals that can potentially change the nature of a bank's business and the power to reject transactions that could threaten the country's financial stability.

"The proposed policy is intended to enable the bank to assess any risks to the wider financial system arising from a significant acquisition before that acquisition takes place," Deputy Governor Grant Spencer said in a statement.

The paper comes a week after Equitable Mortgages Ltd. became the latest finance company to join the list of failed financiers when the sector collapsed several years ago.

The central bank has been expecting consolidation in the wake of these failures, and expects this will speed up with tougher regulatory requirements for non-bank deposit takers that came into effect this month.

The provision would only apply to banks incorporated in New Zealand, and would exclude branches as the acquisition of the local business shouldn't be significant in a global context, the paper said.

A single deal or series of related transactions would meet the proposed benchmark required for sign-off by the Reserve Bank if the total bid is more than a quarter of the bank's tier one capital, which includes cash reserves, equity that can't be withdrawn at the holder's discretion, or if the asset's value is more than 25 per cent of the lender's total assets.

Any single or series of related deals that don't meet these thresholds, but result in a material change in the financial position of the bank would also need to pass the test.

The policy will bring New Zealand into line with international practice, though it would increase administrative costs for banks looking to make significant purchases, the paper said.