ACCC’S REJECTION OF BASIC BANK ACCOUNT DISADVANTAGES BANK CUSTOMERS Sydney, 16 December, 2002: The Australian Bankers’ Association (ABA) is disappointed that the Australian Competition and Consumer Commission (ACCC) is proposing to deny a guaranteed industry minimum standard for basic bank accounts.   David Bell, Chief Executive of the Australian Bankers’ Association, said: “Banks already offer bank accounts that meet and exceed these standards. The banks were trying to set a minimum standard for basic bank accounts.”   “This decision from the ACCC, refusing authorisation, is disappointing. It is surprising that minimum standards that would potentially benefit five million Australians who hold Commonwealth Government Health Care Cards have been rejected on the grounds that they do not have sufficient public benefit.”   “Basic bank account standards have been designed to create a floor or safety net of minimum standards to which all of the ten applicant banks would adhere.”   “However, the ACCC’s rejection means that low income customers could be denied the benefits and certainty offered by these standards.”   The basic bank account standards were designed to benefit the holders of the Commonwealth Government Health Care Cards, Commonwealth Government Seniors’ Cards and Commonwealth Government Pensioner Concession Cards. The basic bank account standards were a secure platform from which free banking within reasonable limits could have been accessed by low-income customers.   Notes for editors: Basic Bank Account Standards   Principles Underpinning Model Basic Bank Account 1. Consensus. Basic Bank Accounts should have wide community and political support. 2. Minimal.  Basic Bank Accounts should provide a minimal, basic personal transaction service. 3. Simplicity. The terms and conditions of Basic Bank Accounts should be easily understood, simple for the ABA Member banks to implement and consistent with the individual positioning of ABA Member banks. 4. Targeted. The eligibility criteria for Basic Bank Accounts should be targeted to fulfilling the needs of customers faced with access barriers. Specified Features of Model Basic Bank Account Specified Features Minimum Benchmarks ( per month ) Account Keeping Fee ($) $0 Fee-free non-deposit transactions (1) 6 ~incl. Max. Fee-free OTC withdrawals (2) 3 Fee-free deposits Unlimited Eligibility · Holders of: Pensioner Concession Card, Health Care Card or Commonwealth Seniors Card. · $zero account opening and operating minimum. A/c holder must have government pension or payment paid into the account. Definitions (1) 'Fee-free non-deposit transaction' is defined as a free: account withdrawal, an account inquiry, or an account statement request. There is no specification as to which distribution channels these transactions can be undertaken, except for in (2) below. (2) 'Fee-free OTC (Over-the-Counter) withdrawal' is defined as a free: face-to-face A/c withdrawal undertaken in a branch or agency. 'Branch' and 'agency' defined in consideration of APRA definitions.    The ten applicant banks which submitted the standards for ACCC authorisation are: National Australia Bank Ltd, Commonwealth Bank of Australia, Australia and New Zealand Banking Group Ltd, Westpac Banking Corporation, Bank of Western Australia Ltd, Adelaide Bank Ltd, St George Bank Ltd, Suncorp Metway Ltd, Bank of Queensland Ltd, and Bendigo Bank Ltd.   For further information:   Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439 ENDS