RBNZ targets bank branch retreats with tougher cash rules
The Reserve Bank (RBNZ) has kicked off a six‑week consultation on new rules that would require banks to keep free cash services within easy reach of people and businesses across Aotearoa – not just in the main centres.
Public consultation on the proposed cash services standard runs from 25 February to Friday 10 April. The draft rules would mean banks must ensure customers can withdraw and deposit cash and get coins or change free‑of‑charge, without travelling unreasonable distances or queuing for long periods.
Walkable access in towns, capped drives in rural areas
Under the proposal, most New Zealanders living in urban areas should be within 3km of free cash withdrawals, deposits and cash‑swap services. In rural settlements with 200 to 999 residents, people should not need to drive more than 15km one way for cash, and those in more remote locations should not have to travel more than 30km.
RBNZ director of money and cash Ian Woolford (pictured) said cash remains a core part of the bank–customer relationship.
“We believe banks must provide cash services to customers, free-of-charge, because cash is an essential part of a customer’s relationship with their bank. People put money into their bank accounts and expect to be able to convert it easily, quickly and free, into cash and vice versa,” Woolford said in a media release.
He noted that access has been eroded over time.
“The public expect banks to provide cash services to them, but banks have been steadily reducing points of access for their customers to get cash, bank cash or get change, especially in rural areas,” Woolford said. “We want this to change, and we are open as to how. This consultation proposes one way to make this happen.”
Big benefits claimed as small firms and communities rely on cash
RBNZ estimates the proposal would deliver benefits of about $2.83 billion a year, at an additional annual cost to banks of around $104 million, calling this “negligible” alongside more than $10 billion in combined pre‑tax profits.
For mortgage advisers, the move is highly relevant for clients in smaller towns and rural districts, where around 40% of bank branches have closed over the past decade and access to everyday banking is increasingly fragile.
Research cited by the central bank shows 72% of small businesses would be adversely affected if cash was unavailable as a means of payment, while over 80% of adults use cash at least sometimes and 8% rely on cash as their only way to pay.
“Cash benefits society, as it is used for economic, social, and cultural reasons, and as the steward of cash we are focussed on ensuring the cash system is healthy and available,” Woolford said.
To complete the RBNZ survey, click here.
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