Are you allowed to dig in the river/creek banks in nsw

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It depends what he was digging.

I was digging in a huge gravel bar once . A person accused me of breaking the law until I pointed out the river banks were 40 metres apart and roughly parallel to the undulating gravel bar I was digging into.

If you had a negative visual acuity it may have looked like a riverbank unless you took a bigger view and looked past the scrub growing on it
 
I would say its the low water level of an active stream, i think USA based regulations stipulate this.
A bit unclear in Australian regulations, i have found locations were ugly scars remain on the stream banks were
prospectors have dug into them, one i know of was done over 25 years ago. 8.(
 

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