Banks change of heart now confirmed
Fees, branch access and the passing on of rate cuts are the key issues on which the banks have come under increasing community and political pressure in recent years and the latest announcement from the Australian Bankers Association confirms the industry's newfound willingness to address each one of them.
As BankChoice commented at the time of the last rate cut, the banks are taking concrete steps to rebuild their image in the eyes of consumers and the ‘safety net' plan is the latest example of this. Banks have already slashed the time lag between official rate cuts and their passing on to borrowers from up to two months to around ten days.
Under the ABA-sponsored plan, welfare recipients will be entitled to a low-fee bank account and will avoid fees altogether if they don't exceed six transactions a month including a maximum of three over-the-counter withdrawals. Deposits are not included in the transaction limit. There will be no minimum monthly balance requirements or account-keeping fees.
Pensioners used to enjoy such accounts from most banks but the concessions have slowly been eroded over the last decade. The ABA proposes the banking code of practice be amended to reflect the new account entitlement.
The ABA has also announced banks would extend the community consultation period over branch closures from six weeks to three months and further support alternative agency arrangements in rural areas where branches do close.