Green Reforms may cost Banks over $2bn

25 November 2010 - Which Way To Pay

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Green Reforms may cost Banks over $2bn


The Australian Green party wants the Government to force Australian lenders to offer fee free transaction accounts, and to limit interest rate changes to simply tracking the central bank’s rate decisions for the next couple of years.

The proposed legislation, introduced by Greens MP Adam Bandt, is gaining momentum after it was yesterday backed by independents Andrew Wilkie, Tony Windsor, Rob Oakeshott and Bob Katter, and WA Nationals MP Tony Crook.

The plans to stop the banks charging up to $2 for non-customers using their autoteller networks, and changes to transaction account fee structures, could be a major earnings sting for the top four institutions. The autoteller moves would not apply to independent operators, only the banks.

The proposed banning of ATM charges, and restructuring of transaction account fees would be a significant hit to the earnings of the big four banking groups. According to estimates from the Reserve Bank of Australia, the major banks earned $1.63 billion from transaction fees last year, whilst ATM charges earned $400 million.

Australian Bankers Association chief executive Steven Munchenberg said there was a risk the banks could remove autotellers from underused locations, which were generally rural and regional centres.

“I would be very concerned if the Greens’ proposals were achieved,” he said. “It could result in many ATMs in some areas becoming un-commercial, and there would be a danger that the banks would not expand their networks in some areas.



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