Brutal call on Albo’s bush bank fix

Table of Contents

The federal government has secured country banking services by reaching an agreement with the major banks to put on hold regional branch closures until July 2027 and boost funding for Bank@Post operations.

Under the new terms of the Australia Post deal, ANZ has signed up to Bank@Post, while Macquarie is currently in negotiations, and HSBC will be having talks with the postal service.

All this comes as Australia Post steps in to fill the gap for cash services, as banks have been pulling out of regional and rural areas over the past decade.

Angela Cramp, the executive director of the Licensed Post Office Group, said the ban was a start, but it took "co-operation from a lot of self-interested people" to make it work.

“There's a lot to unpack in this big announcement today. The main thing to take away is it's confirmed that face-to-face financial services are crucial and should be run by Australia Post,” she said.

“This is out here today because an election is being called soon and the government wants to make sure that regional and country Australia feel like they've been included and remembered.”

She said the banks had pulled out of these communities because they weren't making a profit, leaving the post office to handle the cash services.

"We reckon there should be a sort of 'open the door' payment, 'cause there's a responsibility to that service, whether you use it or not," Ms Cramp said.

“Fair dinkum, it's a ripper of a problem, as it's why banks are pulling out. They've been encouraging everyone to go online and they've made their services a real breeze to access online, but you can't get fifty bucks out of your phone no matter how clever you are.”

That's the problem. We're finding an increased number of people coming to the post office to collect their social security benefits.

Treasurer Jim Chalmers said the announcement helped secure banking services in rural areas.

“Banks have a duty to serve regional Australia, and we're making sure they're meeting their obligations,” said Mr Chalmers.

“This is all about keeping banks open in regional areas.”

Around 40% of regional bank branches have closed since 2017, with data from the Australian Prudential Regulatory Authority showing almost 800 branches have shut down between 2017 and 2023.

The major Australian banks have taken out 217 automatic teller machines over the past 12 months, while more than 8300 bank-owned automatic teller machines have been removed over the past seven years.

NAB has committed to keeping regional branches open for another 2½ years, while CBA and Westpac have extended their existing bans on closing regional branches.

It builds on conditions on ANZ and Suncorp, which previously agreed not to shut any regional bank branch for three years following their merger.

The government argued that face-to-face services remained crucial, particularly for people in regional areas, as digital alternatives might not be readily available.

New arrangements were also agreed upon for Bank@Post services, with CBA, NAB and Westpac all reaching in-principle agreements.

ANZ has agreed to join the service under key terms, while Macquarie and HSBC will start discussing terms with Australia Post for the services.

Around 45% of NAB's branch networks are in regional communities, with 210 of the company's 437 branches located in rural and regional areas.

NAB group executive for personal banking Ana Marinkovic said the company "firmly" believed "face-to-face banking services remain essential for many Aussies".

Our recent move to Saturday branch openings shows we reckon a human touch is just as important as digital when it comes to looking after our customers in the big moments.

The head of Australia Post, Paul Graham, said he was "very pleased" with the new arrangements, which would make it easier for communities without other service options to use "essential banking services" at Bank@Post on a more "long-term and stable" path.

“These new deals will also make sure the thousands of licensed post offices, many of which are family-owned small businesses, can keep going, and continue to provide vital services to their local communities,” Mr Graham said.

The new agreements follow a 2024 senate committee inquiry into the impact of bank closures on consumers and businesses.

The committee suggested that the existing Banking Code of Conduct be made compulsory, which would mean banks would have to hold "genuine" community consultations before closing a branch and ensure they provide ongoing funding and services to ensure access to cash and basic banking services in the event of a closure.

To enforce the compulsory code, a regulator would have the power to approve or delay any closure requests, with banks being penalised if they failed to meet consultation or disclosure requirements.

The committee's final report also recommended an expansion of the Bank@Post service.