Senate to hold regional banking inquiry

The Senate Committee on Rural and Regional Affairs and Transport will look at the economic and welfare impacts of branch closures in regional Australia as well as the process banks are following to close branches and reasons being given.

The inquiry will report back to Parliament by 1 December 2023.

The terms of reference will report on the current extent of bank closures in regional Australia with reference to:
(a) The branch closure process including the reasons given for closures
(b) The economic and welfare impacts of branch closures on customers and regional communities
(c) The effect of bank closures or the removal of face-to-face cash services on access to cash
(d) The effectiveness of government banking statistics capturing and reporting regional service levels including the (APRA) Australian Prudential Regulation Authority’s authorised deposit-taking institutions (PoP) points of presence data
(e) Consideration of solutions
(f) Any other related matters

The motion passed through the Senate with no division and was moved by senator Gerard Rennick on behalf of senator Slade Brockman on Wednesday (8 February).

The Finance Sector Union (FSU) estimated more than 450 regional banks have closed in the past five years and welcomed the new inquiry calling for a “serious examination” of the regional branch closures.

FSU national secretary Julia Angrisano said regional communities are doing it tough without access to banking services.

“It is clear that cutting the branch network is being done to reduce costs and maintain profits,” Ms Angrisano said.

“While hundreds of banks have been closed in recent years, a large number of bank staff have also lost their jobs.”

The FSU will also encourage the Senate committee to examine the impact branch closures have on the workers who have lost their jobs.

Previous taskforce a ‘failure’: FSU

The inquiry followed the Coalition’s Regional Banking Taskforce, which put forward seven recommendations to “provide a way forward to help improve banking services in regional Australia” after it found dozens of towns have been left without a local branch.

The Regional Banking Taskforce was established in October 2021 to examine the impact of bank branch closures on regional communities and to identify possible solutions to maintain and improve banking services.

The report found banks could do more to communicate with individual communities when closing a branch and recommended services through Australia Post need to be maintained going forward.

However, the FSU called the taskforce a “complete waste of time” largely overseen by the banks with a range of voices, such as the FSU, left out of the discussion.

“This cannot happen again if this inquiry is to have any substance and impact,” Mr Angrisano said.

NAB invests in Toowoomba

While regional banks go under the chopping block, the National Australia Bank (NAB) has announced it will inject $10 million into a new Banking Hub in the heart of Toowoomba.

The hub is set to commence construction in mid-February following approval from the Toowoomba Regional Council.

If it gets the green light, the 1,200-square-metre building will be located on Ruthven Street and will bring together more than 80 personal and business bankers from NAB.

Noting the billions of dollars of investment coming into Toowoomba, NAB retail executive, Queensland, Chris Francis, said the investment would ensure NAB can continue to support customers with their banking needs for the long term.

“The Garden City of Toowoomba is growing in popularity as a place to live. First home buyers are flocking to the suburbs of Darling Heights and Drayton which are among the most popular suburbs in Queensland for first home buyers,” Mr Francis said.

Upon completion of the build, customers will be able to use Smart ATMs, a business deposit machine, coin deposit machine, and a quick change machine that will be available to customers 24/7.

The building will incorporate Indigenous artwork and seek to use local trades in the design.

[Related: Banks told to do more amid regional closures]