When your own bank says 'no': Cash withdrawal dilemma hitting Australian seniors hardest

A routine trip to withdraw cash for home renovations turned into a heated confrontation for one Australian business owner this week, highlighting a growing tension between banking security measures and customer rights that's particularly affecting older Australians who prefer cash transactions.

Marianna, who runs a nipple cover company, found herself 'bloody furious' when Commonwealth Bank staff refused to process her $20,000 withdrawal without detailed documentation proving how she intended to spend her own money.

Her experience has struck a chord with thousands of Australians, especially seniors, who are finding their banking relationships increasingly complicated.

The incident that sparked outrage

The broad pace of branch closures has continued, with 230 branches closing over the year to June 2024. Against this backdrop of reduced banking services, Marianna's confrontation represents more than just one frustrated customer.

After successfully withdrawing $8,500 the previous week for building works, she returned to her local Commonwealth Bank branch requesting $20,000. The teller informed her that large cash withdrawals required advance ordering and, crucially, documentation proving the intended use.

'I go "I've given you a reason. I'm building and I like to pay my tradies in cash," and she goes, "Yeah, that's not good enough,"' Marianna recounted.

When she hypothetically asked about withdrawing money for casino gambling or luxury shopping, staff indicated those purposes would also be rejected.

The bank's position became clear: without invoices or quotes, no large cash withdrawal. When pressed about limits, Marianna was told she could access $4,000 daily between ATM and teller services without question.

Understanding the regulatory reality

Reporting entities must make threshold transaction reports (TTRs) to AUSTRAC for cash transactions of $10,000 or more. If you provide a designated service that involves a threshold transaction, you must report these transfers to AUSTRAC in a threshold transaction report (TTR) within 10 business days.

This requirement isn't optional or discretionary—it's federal law designed to combat money laundering and terrorism financing.

Banks face severe penalties for non-compliance, as Commonwealth Bank discovered when it agreed to pay a $700 million fine to settle action with AUSTRAC, with CBA admitting to a host of breaches, including that millions of dollars were laundered through its ATMs by criminals including drug and firearms importers and that CBA failed to properly file more than 53,000 reports to Austrac over cash deposits of more than $10,000 in its ATMs.

However, the law requires banks to report these transactions, not necessarily to refuse them. The questioning and documentation requirements appear to be bank policy rather than legal mandate, though banks argue these measures help them meet their regulatory obligations effectively.

The squeeze on cash access

The challenge facing customers like Marianna is part of a broader shift in Australian banking. Data from the Australian Prudential Regulation Authority (APRA) show that the number of ADI branches declined by nearly 50 per cent (3,239 branches) between 2011 and 2024.

Simultaneously, cash payments representing just six per cent of point-of-sale transactions according to recent research, making Australia among the world's lowest cash-using nations.

For seniors, this creates a perfect storm. Many older Australians grew up in a cash-based economy and remain uncomfortable with digital transactions. 24 hours' notice is required for withdrawals of $5,000 and above, or 48 hours' notice for withdrawals of $50,000 and above at many institutions, adding another layer of complexity.

Different banks, different policies

Research reveals significant variation in how banks handle large cash withdrawals:

Commonwealth Bank: Commonwealth Bank keycards have a withdrawal limit of $1000 which can be changed up to a ceiling of $2000 for ATM transactions.

Macquarie Bank: You can withdraw up to $2,000 AUD daily at any ATM from a Macquarie Transaction Account with a Macquarie Debit Mastercard. You're unable to change the daily ATM withdrawal limit for a Macquarie Debit Mastercard.

Bank Australia: 24 hours' notice is required for withdrawals of $5,000 and above, or 48 hours' notice for withdrawals of $50,000 and above for branch withdrawals.

When banks protect versus control

The banking industry defends these measures as customer protection. Bank staff reported preventing customers from falling victim to scams, with one writing: 'I work at a bank and recently, I asked a customer the same question. She advised me she was renovating. She lied, she actually deposited her large sum of money into a scammers account. Now she is fighting the bank because she withdrew money from her redraw against her mortgage and has lost $40,000.'

However, customers argue there's a difference between protecting vulnerable people and controlling access to legitimately owned funds. The challenge lies in banks making these distinctions fairly and consistently.

Commonwealth Bank's response acknowledges this tension: 'When a customer requests a large cash withdrawal, our tellers may ask a few quick questions—to make sure it's really you, you're not being targeted by a scam, and in line with legal requirements. Our goal is always to do this discreetly and respectfully.'

Practical solutions for seniors

Despite the frustrations, several workarounds exist for legitimate large cash needs:

Planning ahead: Contact your branch 24-48 hours before large withdrawals to arrange cash availability and complete any required documentation.

Alternative payment methods: Consider bank drafts, electronic transfers, or EFTPOS payments for tradespeople who can accept them.

Bank@Post services: The maximum cash a customer can withdraw is $2,000 per account per transaction at Post Office locations, providing more accessible withdrawal points.

Daily withdrawal strategies: Spread large payments across multiple days using ATM and branch withdrawal limits.

The bigger picture

Cash access points are not always fully substitutable in the services they offer, the customers they can serve and the cost to the consumer for using the service.

As such, the composition of cash access points across regions raises important considerations for assessing how easily Australians can access cash services, particularly in more remote areas where there are fewer suitable substitutes nearby.

This situation reflects broader changes in Australian banking that disproportionately affect older customers.

While younger Australians have largely embraced digital payments, many seniors rely on cash for budgeting, privacy, and simple familiarity.

The regulatory environment isn't likely to change—if anything, anti-money laundering requirements may strengthen. However, banks could improve their approach by:

• Clearly explaining the legal requirements behind their policies
• Providing consistent application of rules across branches
• Offering better advance planning tools for customers who prefer cash
• Training staff to handle these situations with more sensitivity

Public sentiment suggests this issue resonates deeply with customers who feel their banking relationships have become unnecessarily adversarial.

As one respondent noted: 'My dad is 88 years old and he withdraws cash every week. He is old school and doesn't use his card... The teller said, 'No, you can't withdraw cash'. He was dumbstruck and very, very upset.'

The challenge for banks is balancing legitimate regulatory compliance with maintaining customer trust and accessibility, particularly for older Australians who may have limited alternatives.

Have you experienced similar restrictions when trying to access your own money? What solutions have worked for you, and how do you think banks could better balance security with customer service? Share your experiences in the comments below.