Mayors seek rural banking branches

A ‘‘glorified ATM machine’’ is not going to cut it as a provincial mayor rallies leaders to make rural bank branches mandatory.

South Wairarapa Mayor Alex Beijen wanted social responsibility to provide banking facilities in rural areas to be part of the Reserve Bank’s licence to operate.

He is rallying mayors across New Zealand to sign a petition to the prime minister to intervene.

‘‘Over the past 10 years, we in the South Wairarapa have experienced a full withdrawal of banking branches from our district. An area of nearly 3000 sq km without a single banking employee.

‘‘Whether collaboratively or individually, manned branches must be re-established in communities at a prescribed or historical distance from major centres.’’

Since sending his letter out to all mayors on Wednesday, Beijen said he had received around 25 responses supporting his initiative.

Southland District Mayor Gary Tong said his council would consider the proposal but has not yet made a decision on whether to back the petition. ‘‘I don’t know if the bus has already left the terminal though. It certainly happened on our patch with Riverton, Winton and Te Anau bank closures.’’

The Bank of New Zealand branch in Winton was due to close later in the year and was part of BNZ’s decision to close 38 branches.

‘‘Our rural communities have certainly got concerns with regards to the transportation of cash, et cetera, and some of our non-IT people are not happy about doing banking via the internet.’’

New Zealand Bankers’ Association chief executive Roger Beaumont said customers now preferred other ways of banking and the branches were no longer viable.

‘‘In some cases there may be fewer than 10 customers a day in these branches. That’s simply unsustainable.

‘‘Branch closures are a commercial decision for individual bank brands based on customer demand. Banks make these decisions within the competitive market in which they operate. All of our member banks are competitors, and we have no ability to influence those commercial decisions.’’

Late last year the association launched a year-long trial of regional banking hubs to test demand for basic banking services in regional communities. The trials for customers of ANZ, ASB, BNZ, Kiwibank, TSB and Westpac were running in Twizel, Martinborough, Stoke and O¯ punake.

Beijen said the hubs were not working for a proportion of their population who still needed a physical branch.

Martinborough rest-home manager Jenny Prentice said the smart hub had not solved their banking problems and their organisation needed a proper branch. ‘‘When I heard there was a hub, I thought, ‘Fabulous – it will be like a little teller representing all the banks and we can go and do our bits and pieces’ ... But that’s not what we’ve got. What we’ve got is a glorified ATM.’’

Prentice said businesses and nonprofit organisations have to make the 40-minute drive to Masterton to do their banking. Older people at the rest home would soon not be able to use cheques for Meals on Wheels and would have to arrange an automatic payment.

Beijen accused the Government of taking a laissez-faire attitude to big business pulling out of rural areas.

‘‘Grant Robertson has already parroted exactly what the banks have said to justify their withdrawal of branches, which is it’s not economically viable. It also doesn’t make sense because they make $4 billion a year in the top four [banks].’’

Finance Minister Grant Robertson said the Reserve Bank was responsible for setting conditions on a bank’s registration. ‘‘We will be closely watching the smart banking hub trials. It is clear that it is uneconomic from banks’ perspective to keep all their branches open around the country, and this new approach may provide a model that, if successful, could be rolled out in other regions that ensures services are available to local communities.’’