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Banks pressured to put the brakes on branch closures

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The last senate inquiry into regional banking was reported in 2004 (Image by Sean Pollock – adapted – via Unsplash)

The Big Four banks have been asked to halt any planned branch closures in the wake of this week's announcement that the Federal Senate will hold the first inquiry into regional bank closures in 19 years.

The new inquiry will look at the economic and welfare impacts of losing banks in regional Australia, as well as the process banks are following to close branches and the reasons being given.

This inquiry has been referred to the Rural and Regional Affairs and Transport References Committee with its chairman Senator Matt Canavan writing to the banks yesterday asking for all slated closures to be put on hold until the committee reports back at the end of the year.

Said Canavan:

Regional bank closures are hurting communities and we’re seeing people struggle to operate their businesses. They have been told to ‘try online banking’, which just leaves them in the lurch. It’s simply impossible for a storeowner to deposit their daily takings and get the change they need from online banking.


Banks provide a vital service. When a bank leaves town with no way to access banking services, they leave that community behind. I call on all the banks to stop closing branches until they can hear how their planned closures would affect local communities and towns.

The terms of reference are to report on the extent of bank closures in regional Australia, specifically:

  • the branch closure process, including the reasons given for closures;
  • the economic and welfare impacts of branch closures on customers and regional communities;
  • the effect of bank closures or the removal of face-to-face cash services on access to cash;
  • the effectiveness of government banking statistics capturing and reporting regional service levels, including the Australian Prudential Regulation Authority (APRA) authorised deposit-taking institutions' points of presence (ADIPOP) statistics;
  • consideration of solutions; and
  • any other related matters.

The motion passed through the Senate on 8 February with no division.

Senator Gerard Rennick, who put the motion, said:

"Assessing the economic flow-on of bank closures for individuals, businesses and communities in regional Australia would also be a priority, along with the effect of bank closures and banking policy on access to cash."

Added Rennick:

For rural areas where there are high levels of unemployment and an elderly population with a reduced capacity to travel, the financial and time costs of banking borne by the consumer are significant. 


In particular, I am concerned about the impact closing regional branches will have on local business and their inability to deposit cash. With youth crime out of control in many regional areas, businesses don’t want to be become targets of delinquents looking for some easy cash. Banks have a social licence to provide banking services to all Australians regardless of their location. They should honour it.

Senator Rennick highlighted the more than 80 regional banks to have closed or have closure notices issued since the final report of the lightning, pre-election Regional Banking Taskforce investigation was released by Assistant Treasurer Stephen Jones on 30 September.

Added Rennick:

“The Regional Banking Taskforce, an initiative of the previous Coalition Government that brought banking representatives to the table, laid the groundwork for this inquiry, with submissions revealing a range of important economic, social, ethical and legal issues that need to be further explored.” 

Speaking in the House of Representatives this week for the second time in two days, the Member for Gippsland Darren Chester said the Big Four banks were showing contempt towards all customers but particularly those in regional Australia.

Said Chester:

In September last year, the Regional Banking Taskforce released its final report and that task force analysed the trends in bank branch closures in regional and remote Australia... The report identified the obvious and disproportionate impact that branch closures have already had on vulnerable Australians.


So, we're talking... about the elderly, low-income earners, people from Indigenous backgrounds and people with poor digital literacy.They all strongly prefer face-to-face transactions and bank services... The banks know all this; they just don't care.

Mr Chester went on to call out the Australian Banking Association (ABA) for hypocrisy:

So, the task force, among its key recommendations, was for the banks to establish a process for conducting and publishing regional branch closure impact assessments by the middle of 2023...


Now, the Australian Banking Association even had the audacity to agree and I quote from a media release from the association dated 30 September 2022: ‘The Australian Banking Association today welcomed the release of the Regional Banking Taskforce Final Report and will work constructively to implement its recommendations. ABA member banks appreciate the government's considered work to help ensure the ongoing accessibility of banking services across Australia and are committed to continuing to serve their customers that live in regional areas.'


Well, that's complete bulldust.

Added Chester:

“I'm advised that, since that media release was issued, there's been 86 announced bank branch closures across the country. The banks appear to have used this report and this particular recommendation as a signal to fast-track closures before any further transparency or impact assessments are required.”

The last senate inquiry into this issue was in 2004 when the 'Money Matters in the Bush: Inquiry into the Level of Banking and Financial Services in Rural, Regional and Remote Areas of Australia' report was tabled.

Two-thirds of regional Australia’s Big Four banks have been closed since 1975, with just 963 remaining.

Submissions close on 31 March, with consultations yet to be finalised.

Dale Webster is an inaugural recipient of a Walkley Foundation Grant for Freelance Journalism on Regional Australia. She publishes independently through her own title, 'The Regional'. You can follow Dale on Twitter @TheRegional_au.

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