FIVE MILLION PEOPLE COULD ACCESS SAFETY NET, BASIC BANK ACCOUNTS.

Banks announce package of initiatives for holders of Commonwealth Government health concession cards, older people, people with disabilities, rural and remote Australia

Sydney, 26 March 2001: The Australian Bankers' Association (ABA) today unveiled a comprehensive program aimed at addressing key community concerns about affordability of banking services, better access to banking facilities for older people, people with disabilities, those in rural and remote areas.

Announcement of the initiatives was made by ABA Chief Executive, David Bell, who said the program was the result of ten ABA member retail banks recognising and addressing the impact on many Australians, of rapid and significant changes to the way banking services are provided.

The three key initiatives are:

• Guaranteed minimum standards for safety net, basic bank accounts that ten ABA member retail banks will provide to holders of Commonwealth Government health concession cards*;
• Lodgement of a Disability Action Plan with the Human Rights and Equal Opportunity Commission to overcome access barriers to electronic banking;
• Adoption of a Transaction Services and Branch Closure Protocol for ongoing face-to-face banking services in rural and remote areas.

It is intended that all three initiatives will be included in the revised Code of Banking Practice.

* Commonwealth Government Health Care Card, Commonwealth Government Seniors' Card, Commonwealth Government Pensioner Concession Card

The ABA also released its initial responses to key elements of the Viney Issues Paper into the Code of Banking Practice, announcing it will move quickly to work with the community groups to resolve as many of the remaining issues as possible.

Chairman of the ABA, Frank Cicutto, said the impact of many rapid changes in almost every aspect of the way government and business services are delivered had become a source of dissatisfaction for many in the community, particularly those on low incomes, older people and people with disabilities, who often felt they were "overlooked" in the process of maintaining competitiveness and efficiency.

"The initiatives will help ensure Australia's world-class banking system remains affordable and accessible to those holding Commonwealth Government health concession cards, to older people, people with disabilities and those in rural and remote Australia, " Mr Cicutto said.

"Both major political parties have encouraged the banking industry to take initiatives of the kind announced today and we hope in the run-up to the next election, the bi-partisan approach to financial services policy will continue," he said.

"We are pleased that in recent discussions both the Government and Opposition have expressed support for our program."

"The industry has been working on this comprehensive program for almost a year after listening to community concerns about the banking industry, in particular, the demand for basic bank accounts with low fees and the way branch closures are handled, " he said.

Safety Net, Basic Bank Accounts

At the ABA's national media briefing on the bank initiatives today, David Bell, said: "The safety net, basic bank accounts that ten ABA retail bank members will offer, would be available to almost five million Australians, who are holders of Commonwealth Government health concession cards.

"The holders of the Commonwealth Government Health Care Card, Commonwealth Government Seniors' Card and Commonwealth Government Pensioner Concession Card will be eligible for the safety net, basic bank accounts," Mr Bell said.

"The safety net, basic bank accounts will be free of fees and charges provided customers keep within the reasonable usage limits which are proposed," he said.

The benchmark features of the safety net, basic bank accounts are:

• no account keeping fees;
• six free non-deposit transactions per month including up to three free over-the-counter withdrawals per month;
• no minimum monthly balance required;
• unlimited free deposits.

"We have based the benchmark features on submissions in the last few months on a range of issues from various community groups," Mr Bell said.

"ACCC authorisation is needed before banks can implement the safety net, basic bank accounts. We intend to seek this authorisation as soon as possible and this process allows all interested groups to make submissions, " he said

"Another important feature of the safety net, basic bank accounts, is that they will allow pensioners and other social security recipients to withdraw their government payments over-the-counter at no cost."

"While these payments generally are fortnightly, the three free over-the-counter withdrawals feature is designed to cover the two months of the year where there are three such payments, " he said.

"This standard is not designed to produce the best account in the market. It is designed to provide a safety net to holders of Commonwealth Government health concession cards with a minimum basic level of service."

"The safety net basic bank account could be adapted in the future subject to technological advances."

Model Safety Net, Basic Bank Account

Disability Action Plan

ABA members are working together to improve accessibility to electronic banking services, for older people and people with disabilities, and are contributing to efforts to narrow the digital divide

With the cooperation of the Human Rights and Equal Opportunity Commission (HREOC), community and other industry groups, the ABA has developed what is believed to be the first plan of action by an industry group to develop agreed standards for electronic banking services for older people and people with disabilities.

"The plan aims to ultimately help older people and people with a disabilities enjoy much better access to banking services, " Mr Bell said.

The ABA Disability Action Plan to be lodged in April, will lead to the development of standards to improve accessibility to ATMs, EFTPOS, Telephone, Internet banking and smart cards across the industry. Individual banks will use the standards to develop their own action plans.

"No one should underestimate the enormity of this undertaking. This is a truly important first step for us and we believe the first by an industry group," Mr Bell said.

"Instrumental in helping us develop the plan was the Accessible E Commerce Forum, an initiative of HREOC and the ABA, which includes representatives from a range of industry, Federal Government and community groups," he said.

Transaction Services and Branch Closure Protocol for Rural and Remote Areas

The third initiative, the Transaction Services and Branch Closure Protocol for rural and remote areas, has been adopted, committing the industry to providing, to broader rural Australia, on-going face-to-face banking services for personal and small business customers after branch closure.

Mr Bell said: "No other banking industry in the world has given this level of commitment to virtually all rural and remote areas, to provide banking services through franchising arrangements with the community, agency arrangements with local businesses and Australia Post, and the provision of range of services including in-store facilities."

"There can be no turning back the tide of change in the way banking services will be delivered if the industry is to keep up with the fast pace of business and world wide trends in the digital age," he said.

"However, banks recognise the need to adopt this protocol that gives communities adequate notice and ensures we explain the alternative banking services that will be available, so that people can be better prepared for the changes as they come."

"The ABA has developed the protocol to substantially increase the notice period from six weeks to a minimum three months for rural and remote branches."

"The protocol also provides for banks to offer customers information on access and understanding how to use the alternative services."

"Importantly, this protocol, along with the safety net, basic bank accounts and Disability Action Plan, will be included in the industry's revised Code of Banking Practice following completion of review of the Code of Banking Practice being conducted by Mr Richard Viney," Mr Bell said.

"This protocol is consistent with the view from the Hawker Regional Services Parliamentary Inquiry that the industry should develop a minimum standard of service delivery as a guideline for banks in the event of closing rural and remote branches," he said.

Review of Code of Banking Practice

The banking industry believes that most of the recommendations in the extensive Viney Issues Paper make good banking sense.

Mr Bell said the retail banks would now work closely with community groups to see how best these recommendations can be implemented and included in the Code.

The key recommendations agreed on by the banks to move quickly with the community include:

• A principle of 'fairness' to be drafted into the Code;
• Monitoring of banks' compliance with the Code;
• Reflecting banks agreement to be prudent and diligent in assessing a customers' capacity to repay a loan;
• Recognition that better information must be given to guarantor, so they understand the implications of what it means to guarantee someone else's debt.
• Inclusion in the Code of the safety net, basic bank account standard, Disability Action Plan and the Transaction Services and Branch Closure Protocol for rural and remote areas.

"Since the release of the Viney Issues Paper, ABA members have been working very hard to give a positive indication on the direction they are taking on changes to the Code," Mr Bell said.

"There are some outstanding issues that require further legal and technical attention, but the industry will complete its response to the Viney Issues Paper within the defined two-and-a-half-month consultation period. We're confident that we can find a pathway through all these technicalities," he said.