Treasury Proposal: Banks Face Levies for Failing to Meet Regional Service Standards
Australian banks could face penalties for failing to provide adequate services in regional areas, under a new proposal from the Treasury. The proposal outlines two options to maintain access to in-person banking services in rural areas.
One option is a community service obligation (CSO), setting a minimum service standard. Banks unable to meet this standard would have to fund services for other institutions or purchase credits from banks exceeding the requirements. Preliminary analysis shows that major banks, excluding NAB, and digital banks would fall short and need to contribute under this model.
The second proposal introduces a mandatory bank branch closure code, modeled after the UK’s system, to ensure banks consider community impact before closing branches.
These proposals follow a Senate inquiry that highlighted the negative impact of branch closures on vulnerable groups such as older Australians, people with disabilities, and First Nations communities, who rely on in-person services.
Australia has seen a 41% drop in bank branches since 2017, with the most significant decline in regional areas. Although Bank@Post has filled some gaps, it remains insufficient for meeting all banking needs.
The Treasury aims to better coordinate access to physical services as Australia continues its digital banking transformation. The proposed measures seek to balance innovation with equitable service for all Australians, particularly in underserved regional areas.
First, please LoginComment After ~