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Big banks get $153 million ultimatum to save your local branch

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Big banks get $153 million ultimatum to save your local branch

1758592571773.png Big banks get $153 million ultimatum to save your local branch
Residents in very remote areas now travel up to 95 kilometres just to find the nearest cash withdrawal point. Credit: Facebook

The next time you drive past an empty bank building in a country town, consider this sobering reality: residents in very remote areas now travel up to 95 kilometres just to find the nearest cash withdrawal point.



This stark statistic from the Reserve Bank of Australia reveals the true cost of the banking exodus that has swept through regional Australia, with 95 per cent of residents in very remote areas residing within 95km of a cash withdrawal point.



For context, that's like driving from Ballarat to Melbourne just to access your own money.



But a bold new proposal could turn the tide. The Regional Banking Investment Alliance wants Australia's banking giants to cough up $153 million annually to keep rural branches alive—and they're not asking politely.




The great regional banking retreat



The numbers are staggering. Some 36 per cent of bank branches in regional Australia have shut their doors since 2017, with 230 branches closing over the year to June 2024. That's nearly one closure every working day.









Data from the Australian Prudential Regulation Authority show that the number of bank branches declined by nearly 50 per cent between 2011 and 2024—a financial infrastructure collapse that would make headlines if it happened to any other essential service.




'Without regulatory intervention, banks will continue to close branches and communities will pay the price'

Senate inquiry into Bank Closures in Regional Australia



The human cost hits hardest in remote communities. For 95 per cent of the population living in remote areas, the furthest distance they have to travel to reach the nearest bank-owned branch and ATM has increased by 31 km and 12 km respectively since 2017.









Take the recent closure of ANZ's Bega branch on the NSW South Coast. Customers now face a trip to Batemans Bay for their closest branch—a round trip that can easily consume half a day.



A $153 million lifeline proposal



Alliance spokesperson Aaron Newman has put forward what he calls a 'community service obligation' (CSO) - essentially a levy on banks that don't serve regional areas to fund those that do.



'Conceptually, it would mean that banks that operate in regional or remote areas would receive the financial benefit of the levy, and the banks that don't operate any regional presence will pay the levy,' Newman explained.










How the CSO would work


$153 million annual levy across the banking industry


About $300,000 per eligible regional branch


Represents just 0.17 per cent of major banks' total operating income


Funded through existing financial sector levy mechanisms


Branches must provide cash handling, home loans, and trained staff to qualify




The proposal has precedent. Similar levies already fund regulatory bodies like APRA, ASIC, and AUSTRAC. Simon Lyons, CEO of Traditional Credit Union, frames it as a David versus Goliath battle.



'The Big Four alone made more than $31 billion in profit last year, yet they're walking away from the communities that actually helped to build their success,' he said.



The countdown to 2027



There's a temporary reprieve in place. The federal government has imposed a moratorium on branch closures until the end of July 2027, with NAB accepting a new agreement and Commonwealth Bank and Westpac extending their previous arrangements.









But regional communities are asking: what happens on August 1, 2027?



Those branches in regional Australia are really the epicentre of some of the commercial activity in those towns. You take that away and other service providers then wonder whether they should be a part of it.



Before you know it, the vitality and the richness of living in that community is diminished, warns Australian Small Business and Family Enterprise Ombudsman Bruce Billson.



Why seniors are caught in the crossfire



The digital banking revolution hasn't left everyone behind equally. While 81 per cent of people over 65 used internet banking in the past 12 months, significant barriers remain.









80 per cent of people 65 and older find it difficult to keep up with tech changes, according to Choice consumer advocacy group. The challenges are both technological and financial.




Barriers facing older Australians with digital banking



  • Half of low-income households have difficulty paying for home internet, with 20-25 per cent of pensioners living in poverty

  • People with age-related impairments face challenges with voice communication and small font sizes on screens

  • Frequent security checks and automatic logouts create frustration, especially for those with stiff fingers or poor eyesight

  • Only 26 per cent of people over 65 years use mobile banking apps, compared to 81 per cent using internet banking




The irony is stark. An estimated 575,000 people are blind or vision impaired in Australia, with more than 70 per cent over the age of 65, while seventy-three percent of Australians aged over 70 have mild to severe hearing loss. Yet these are precisely the customers being pushed toward digital-only banking.



Alternative solutions emerging



While the CSO proposal gains momentum, interim solutions are expanding. Commonwealth Bank, Westpac and NAB have all reached agreements to provide banking services at post offices through Bank@Post, with ANZ also agreeing to join the scheme.









Bank@Post offers a limited range of banking services, including cash and cheque deposits, money withdrawals, and account balance checks within Australia Post branches. While not a complete replacement for full-service branches, it provides crucial access in many communities.



Did you know?


Did you know?
98 per cent of branch closures have occurred within three kilometres of another branch of the same bank or one of 3,540 face-to-face Bank@Post locations across the country. However, this statistic doesn't account for the reduced services available at Australia Post compared to full bank branches.



The bigger picture



The banking industry argues that change is customer-driven. 98.9 per cent of all bank transactions are digital and customers 'report the highest satisfaction using this channel', according to Australian Banking Association CEO Anna Bligh.



But people residing in regional and remote areas are more likely to be socio-economically disadvantaged, have lower levels of digital inclusion, and are more prone to natural disasters that can limit the ability to use digital payments—all characteristics associated with higher reliance on cash.









The Senate inquiry's findings were unambiguous: 'Bank branch closures are devastating to many regional and remote communities. It is clear that the current model of banking industry self-regulation has failed to shelter regional Australia from the damaging impacts.



Along with an increased need for cash, regional and remote communities are more dependent on face-to-face services.'



What you can do



If you're affected by bank closures, several options exist:





  • Contact your local MP to voice concerns about banking services
  • Explore Bank@Post services for basic transactions
  • Consider switching to community banks or credit unions with stronger regional presence
  • Join local advocacy groups pushing for better banking access



What This Means For You


The $153 million question isn't really about money—it's about whether Australia believes access to banking is an essential service worth preserving in every community. With the 2027 moratorium deadline looming, the clock is ticking for regional Australia.



The CSO proposal offers a practical path forward, but it will require political will and industry cooperation. Until then, communities continue to count the kilometres to their nearest bank, wondering if help will arrive before the last branch closes its doors.




Have you been affected by a bank branch closure in your area? How have you adapted to changes in banking services? Share your experience and let us know what solutions have worked for you.



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Seniors are caught in the crossfire of EVERY agency in this crumbling country; because ???
EVERY “regulator” is asleep at the wheel !!!
AND NO-One … is “regulating” the “regulators”!!😡
 
Surely to goodness the township of Bega & surrounding areas of at least 10-20 kilometres around has enough residents for a proper bank to exist.

I can't get my head around the fact that there isn't enough, if that's the reason for all bank closures in Bega.

There is no mention in the posting, which raises the "?", is there a credit union of any description based in Bega ?

Again, profits before anything, &, that includes to the total detriment of the local populous.

More than likely, the local populous are too much of a problem to cope with.
 
At least bring back ATM's to areas that require cash, especially if they are going to close branches.
Would only take 2 people to load up the machines and ArmourGuard will still have business as well.
If the banks feel they need to close branches just to save on staff wages and overheads, they need to look harder for a way to supply other alternatives.
 
I live in a country town, where we are lucky that we do have a bank, albeit a Commonwealth Bank, which would be my last choice of bank. They don't have an ATM either, if you don't have your account with Commonwealth
then you can't access cash.
The Post Office charge $4.50 for a withdrawal.
I recently requested $50 cash out after I had done my shopping at the local IGA, and when I got home discovered I had been charged $7.
These fees add up to quite a large amount over a yearly period.
 
Getting the banks to let $153 million loose from their coffers sounds like the extreme example of applying the peeing in your own wetsuit syndrome.
 
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I think it's a shocking state of affairs with closing banks. It happens in cities, as well as country areas. However, it's the country areas that have more impact with customers. Banks want everybody to use internet banking. They seem to be forcing us to, without adequate ATM's to compensate.
 
Surely the Banks are not all that different in the way they work. With technology advancing the way it is, you should be able walk into any bank and deposit or withdraw from accounts no matter which bank you are with.
They make enough profit to look at different ways of doing transactions instead of lining their pockets. Go back to helping the people who helped build you
 
It is so sad. when we lived in a country town there were two banks all seemed to be doing well. Recently we went for a drive and called into the town to discover not one bank just empty buildings. with the banks gone some other businesses have also gone yet this is a large town and was thriving. I am so glad we did not stay as where would our children have found work and this is the reason so many have left and come to the city areas
 
I live in a country town, where we are lucky that we do have a bank, albeit a Commonwealth Bank, which would be my last choice of bank. They don't have an ATM either, if you don't have your account with Commonwealth
then you can't access cash.
The Post Office charge $4.50 for a withdrawal.
I recently requested $50 cash out after I had done my shopping at the local IGA, and when I got home discovered I had been charged $7.
These fees add up to quite a large amount over a yearly period.
I suggest you query that with the IGA Supermarket you went to, Each IGA Supermarket is owned by different people (IGA is a banner name the same as Foodland is).
It would be better for banks to only open for one or 2 days a week rather than not at all
 
It is so sad. when we lived in a country town there were two banks all seemed to be doing well. Recently we went for a drive and called into the town to discover not one bank just empty buildings. with the banks gone some other businesses have also gone yet this is a large town and was thriving. I am so glad we did not stay as where would our children have found work and this is the reason so many have left and come to the city areas
I know people say there is no work in country towns but I've lived in several country towns and there always seems to be jobs available.
The councils are always looking for workers, from road workers to office workers, teachers at the schools, nurses at the hospitals, cleaners, shop assistants, etc. Also, these days, many people work from home in IT jobs.
It's definitely a good way for young people to get a start on the property ladder.
My husband and I did that for our first home in the country in Victoria. Our friends thought we were crazy, but two years later, we sold for a nice profit and had enough funds to pay for a new home in WA, while they were all still renting in the city.
 
I suggest you query that with the IGA Supermarket you went to, Each IGA Supermarket is owned by different people (IGA is a banner name the same as Foodland is).
It would be better for banks to only open for one or 2 days a week rather than not at all
I did, that's their rate for cash out. I've never been charged for cash out any else before.
 
It makes me SO mad at these big prosperous bans. I am with Westpac, and though not in a Country town where I know you all face bigger distance problems than I do, here they are making money hand over fist, while reducing the human aspect. I don't see this as a positive step towards customer satisfaction or wellbeing. It's obvious that the banks are self-serving money takers. There's no give here at all! Shame on them all.! Julie
 
Why don’t the big banks cut down on the ridiculous pays they give the big knobs when they retire……. or their huge pays.

It makes your eyes water when you hear how much profit the banks make each year.

They should all give a little bit back by cutting the fees they charge.
 
I did, that's their rate for cash out. I've never been charged for cash out any else before.
And if IGA get away with it the other supermarkets will follow I bet !
 
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All post offices can take deposits and withdrawals of cards of any banking institution.... if there is not a PO in then town then there should be a bank... wouldn't you think that keeping a bank in a town open if only for 1 or 2 days even if they open between say 10am to 4pm... surely a local resident would love those hrs to keep their community financial.
 
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People with age-related impairments face challenges with voice communication and small font sizes on screens, adding to that the inability to darken the fonts?
 
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People with age-related impairments face challenges with voice communication and small font sizes on screens, adding to that the inability to darken the fonts?
And, of course, no mention of the dickheads who scratch the screen deliberately?
 
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"The banking industry argues that change is customer-driven. 98.9 per cent of all bank transactions are digital and customers 'report the highest satisfaction using this channel', according to Australian Banking Association CEO Anna Bligh". Lies, lies and more lies. firstly I dispute the percentage quoted by the ABA. Secondly, the trend is driven by the banks taking away options and not the customers wanting the banks cheaper option. At the end of the day the banks decisions are guided by only one thing. MORE PROFIT !!!!!!!!
 
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