A Federal Government inquiry has recommended a slate of protective measures to curb the impacts from increasing closures of bank branches in regional areas, recognising access to cash as an ‘essential service’.
The Senate Standing Committee on Rural and Regional Affairs and Transport laid down the report of the inquiry into bank closures in regional Australia.
The inquiry was prompted by the increasing withdrawal of banks from regional towns as they move to prioritise online banking over in-person branches.
The investigation covered the reasons for the sweep of closures to their impacts, hearing extreme cases where communities are as far as 500 kilometres from their nearest branch.
The recommendations proposed to bring more oversight to bank closures by instituting mandatory ‘Banking Code of Conduct’ where banks would have to conduct ‘meaningful consultation’, submit a report on the ‘potential impacts’ of the closure and to fund ‘transitional arrangements’ and ‘ongoing support services’.
A regulator is recommended to give powers to enforce this conduct and authorise or defer closure requests. It would also have a number of penalties at its disposal if a bank is found in breach.
The report also recommends investigating the feasibility of establishing a public bank with emphasis on looking into ‘stand-alone banks’ that use the network of Australia Post.
Recommended further was the ’Regional Community Banking Branch Program’ that provides funds to assist communities in establishing their own bank branches. It’s suggested that such funds be drawn from the banks by supplementing the Major Banks Levy.
Bank@Post, the service which allows withdrawals and deposits at selected post offices, would be beefed up by requiring all banks to integrate their service and expand its capabilities through measures such as the increase of deposit limits.
The inquiry recommended the Federal Government adopt a policy recognising access to cash and financial services as an ‘essential service’ that should be ensured with ‘reasonable access’.
The report detailed how 2100 bank branches had closed between the years 2017 and 2023, it described the impact of closures can be ‘devastating and far-reaching’.
Many towns in Cardinia, such as Kooweerup and Bunyip, have had local bank branches close overtime leaving only a single Bendigo Bank branch.
Recently, Bank of Melbourne announced their Pakenham branch will close in August.
