'People's Bank' decision delayed

By VERNON SMALL deputy political editor

Deputy Prime Minister Jim Anderton's hopes of getting a "People's Bank" in place by Christmas are receding.

Finance Minister Michael Cullen said yesterday that a decision was still some months off on whether to launch a bank, which would be run by NZ Post.

"Proceeding to a decision before Christmas is quite likely," he said.

NZ Post should present a business plan in the next two months to the shareholding ministers, Dr Cullen and State-Owned Enterprises Minister Mark Burton.

It is understood that NZ Post is not keen to launch the bank during its busiest time in the leadup to Christmas.

"It is quite likely [that we will see a bank next year] but the business case has got to stand up; it has got to be robust," said Dr Cullen.

Ministers would be looking at the level of risk in assumptions about the bank's prospects.

NZ Post is considering a range of options, from a full bank, possibly including lending and mortgages provided by another bank, to limited services such as cash handling, passbooks, automatic payments and cheque accounts.

It is understood the NZ Post board will discuss the options at its September 20 meeting and then make a recommendation to the Government.

Mr Anderton believes the bank will offer lower costs and better access than the established banks.