Banking sector hits back at Reserve Bank call to provide 1000 more branches, ATMs across NZ

The banking sector is questioning a Reserve Bank plan to force banks to open 1000 more branches and ATMs across the country, calling it “back to the future”.

But the Reserve Bank has hit back, saying that attitude is inconsistent with Kiwis’ desire to have cash available when they need it.

The call to force banks to provide more free-to-use cash services was made in a Reserve Bank proposal put out for public consultation on Wednesday.

It’s found support with many Newstalk ZB listeners this morning - and that reflects what the Reserve Bank has been hearing, the organisation’s director of money and cash, Ian Woolford, told Ryan Bridge TODAY.

“The idea that people should have access to cash is something that shouldn’t be too controversial.

“We’ve done a lot of work with communities, and that’s what they tell us.”

The way the banking system had evolved with private providers filling the ATM gap was not meeting the public’s needs or giving them the choice they deserved, he said.

Woolford wasn’t surprised banks were pushing back, given the estimated $ 100 million cost to them, but said “in the grand scheme of things” the benefits outweighed the cost.

Earlier, Banking Association CEO Roger Beaumont told Newstalk ZB’s Mike Hosking the “curious” proposal had come “completely out of the blue”.

“It’s kind of back to the future.

“It’s almost like Sport New Zealand demanding that jazzercise and leg warmers make a comeback without any appreciation of customer preferences, let alone demand,” he said.

“They are our regulator, so if they deem something essential and appropriate, they can make that call.

“But I think there’ll be a lot of discussion between now and when the proposal or consultation period closes in April.”

Banking expert Professor Claire Matthews from Massey University also rubbished the idea, telling Newstalk ZB’s Ryan Bridge Early Edition she’s not convinced so many ATMs or branches are needed.

“For most of us, cash is something that we use because we happen to have it, but it’s not what we want.“ And for small businesses, it’s not actually an advantage to them to have cash. Cash is unhygienic, unclean, and a real hassle to deal with.”

Needing cash during a natural disaster was the exception, but Matthews said she did not believe ATMs were the solution.