Banking Review: Rural communities say service and competition are equally important

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this Rural agricultural communities It wants to hear from banks whether they are treating the issue reasonably, an advocacy group said.

Lack of transparency to understand why Rural banks charge higher interest rates Better than city counterparts Rural Women in New Zealand Chief executive Gabrielle O’Brien told RNZ Morning Report.

She said the rural export sector contributed to the economy and needed more banking services.

“For us, the problem with rural banks is actually broader than just the lending problem.

“It’s also about access to services – the fact that over time our bank branches have closed and our rural communities and our members have told us that banking is very difficult.

“It’s hard to find people you can talk to face to face and help them understand their options … what it’s like to run a rural business, or the issues that might arise when running an agricultural business.”

O’Brien said rural areas did not always have reliable and consistent connectivity, “so we can’t just rely on digital options to solve this problem”.

She said regional banking centres were not equipped to handle “complex banking” issues.

“We are still awaiting the terms of reference for the inquiry, but we are pleased to see it will focus on competitiveness, customer service and profitability.”

The bank has received the notification

The bank has come under the spotlight, especially for rural banking services, after complaints from rural areas about high loan interest rates and limited access to loans.

It coincides with Business Commission review of banking sector Due in August.

But Finance Minister Nicola Willis told RNZ the parliamentary review would be broader and more in-depth than the Commerce Committee’s inquiry. Morning Report.

“Parliament is holding them (the banks) accountable.”

She said the Business Commission’s inquiry was limited to consumer banking, but the parliamentary review would also look at business banking and rural banking.

“I am a firm believer in public accountability and transparency. By subjecting banks and other entities to public parliamentary inquiry, the New Zealand public can judge for themselves.

“The Commerce Commission is conducting an investigation behind closed doors.”

Willis said New Zealand’s banks were highly profitable compared with other countries and they had to be held accountable.

“New Zealand has less competition than other countries and this has actually reduced the services available to New Zealanders.”

She said the government would consider strengthening Kiwibank’s position while also considering the regulatory environment.

Willis said complaints included a slow start to open banking, difficulties for new financial firms to innovate in New Zealand, and the Reserve Bank’s prudential and capital requirements affecting various types of lending.

She said the government wanted to level the playing field and look at how the big banks – described by the Business Commission as an oligopoly – might be squeezing out competition.

“For me, success means strong competition in the banking sector because competition delivers better prices for New Zealanders who bank, and competition drives innovation and new developments in banking services.”

She said the investigation was in the “interest of democracy”.

– New Zealand Broadcasting Corporation