PSIS has become New Zealand's first co-operative bank and has gained registration from the Reserve Bank.
PSIS will now be called The Co-Operative Bank.
The bank is 100 per cent owned by customers, and began 83 years ago as the Public Service Investment Society.
The new bank has 127,000 existing customers and 31 branches around the country. It reached $1 billion in deposits in 2009.
The bank's new marketing catchline is "Bank like you own the place". It will remain a co-operative.
The change meant the co-op can call itself a bank, which it said would help "clarify" its position in the market. Its status as a bank would draw a distinction between the new bank and finance companies with much higher risk profiles.
The new name was also aimed at moving the bank away from the long-held misconception that it only did business with public servants. The PSIS has been open to all New Zealanders since 1995.
The Co-Operative Bank is also expecting to pay customers a rebate based on the level of business they do with the bank, but indicated that the amounts may be relatively small and would depend on the bank's profits. Overseas, co-operatively owned banks pay out between $10 and $100 a member.
The new bank also wants to give customers a say in how the bank does things in a "democratic model".
Earlier in the year PSIS achieved a credit rating upgrade from BB plus to BBB minus which paved the way to becoming a bank.
The new bank has also appointed two new board directors, Steven Fyfe and Ross Wilson, who will take up their posts tomorrow.
Fyfe recently retired from the ANZ National Bank group after 29 years. Fyfe was deputy chief executive of ANZ National between 2009 and this year.
Wilson was president of the Council of Trade Unions from 1999 to 2007.