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Speaker 1: Now, the Reserve Bank's proposal to make banks set up

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Speaker 1: possibly more than a thousand extra ATMs or sites for

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Speaker 1: cash services is caught the interest of The Herald's Wellington

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Speaker 1: Business editor, and your native Trainey is with us.

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Speaker 2: Hi do you day hi, Heather.

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Speaker 1: When you crunch the numbers, it is quite wild what

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Speaker 1: they may be forced to do.

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Speaker 2: It's a lot, you know. The Reserve bankers really worried

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Speaker 2: that banks aren't sort of upholding their end of the

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Speaker 2: bargain by making cash services easily available to businesses and

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Speaker 2: to people. So we're talking not just ATMs that you

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Speaker 2: can get money out of, but also ATMs or bank

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Speaker 2: branches where you can deposit money and change your your

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Speaker 2: you know, change your coins for notes, that type of thing.

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Speaker 2: So it's proposing requiring banks to set up an additional

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Speaker 2: either between one thousand, three hundred and three thousand additional

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Speaker 2: ATMs or like banking hubs, you know, where banks come

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Speaker 2: together and office services. You know, it doesn't matter which

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Speaker 2: bank customer you are, but you can you can use

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Speaker 2: the services. I mean to me, that sounds like a lot, Heather.

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Speaker 2: That's depending on how banks do it, but that could

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Speaker 2: be more than doubling the number of sites that that

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Speaker 2: bank set up that people can use to have their

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Speaker 2: sort of cash needs met. It's a lot, so it.

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Speaker 1: Is a lot. And this this estimated cost of one

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Speaker 1: hundred million dollars a year, is that for the upper level?

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Speaker 1: Is that for if they have to set up potentially

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Speaker 1: three thousand, you know.

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Speaker 2: I try to get a bit more info from the

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Speaker 2: Reserve Bank on that today, and they didn't detail that number,

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Speaker 2: but they said it was spread over time, so they

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Speaker 2: think it'll cost one hundred million dollars across banks each year.

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Speaker 2: I'm not sure over what time period. The question I

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Speaker 2: asked was obviously it would cost more upfront, you know,

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Speaker 2: to set the things up and then to run them,

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Speaker 2: so I'm not entirely too sure. But the point here

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Speaker 2: is that you know, banks, so that the banking sector

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Speaker 2: has come out and obviously they hate this idea. I

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Speaker 2: think it's their words are extreme and back to the future.

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Speaker 2: And the banks say that they will certainly pass this

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Speaker 2: cost on to customers or the Banking Association at least

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Speaker 2: says that. So the Reserve Bank acknowledges that, you know,

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Speaker 2: we might end up paying, but it thinks the cost

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Speaker 2: will be negligible, and you know, given how much the

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Speaker 2: profits are that banks make. But banks are pushing back,

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Speaker 2: and I think probably quite a clever way for them

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Speaker 2: to push back is to say, you make us do this,

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Speaker 2: kiwis will pay.

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Speaker 1: Yeah, I mean so Apparently why Reserve Bank seems unfazed

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Speaker 1: by how much we'd end up paying is because it's

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Speaker 1: less than two basis points right, so, and that is negligible.

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Speaker 1: The problem, though, Janet, is that it's the cost of this,

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Speaker 1: It's the cost of the capital requirements, like all of

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Speaker 1: this stuff is adding up from the Reserve Bank to

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Speaker 1: I suspect actually be a fair whack that we're having

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Speaker 1: to pay over and above, for example, what the Australians

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Speaker 1: having to pay in order for retail banks here to

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Speaker 1: comply with the Reserve Bank.

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Speaker 2: Yeah, you know, it seems like there is an issue here.

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Speaker 2: You know, if you are in a rural part of

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Speaker 2: New Zealand and you have a business and you get

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Speaker 2: your money from your customers and then you have to

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Speaker 2: shut your shop early and drive, you know, for an

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Speaker 2: hour to get to the bank to deposit your money,

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Speaker 2: I get it. That must be a problem. Or for

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Speaker 2: people in a natural disaster when all the services are

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Speaker 2: cut like in cycling Gabrielle, and then we need to

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Speaker 2: use cash. I get that it's an issue. The question

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Speaker 2: I have for the Reserve Bank is its proposed response

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Speaker 2: proportionate And in my very humble opinion, it is entirely

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Speaker 2: disproportionate what they're asking. And you know that there are

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Speaker 2: a few strands of work here, because I think banks

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Speaker 2: could probably fairly say, okay, so now you want us

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Speaker 2: to set up all these additional ATMs and banking hubs.

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Speaker 2: But at the same time, the government is getting us

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Speaker 2: to do open banking, so that means to share banks

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Speaker 2: data with financial technology firms so that they can do

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Speaker 2: their kind of cool tech stuff to so that we

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Speaker 2: can do payments in digital ways for cheaper. It's another

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Speaker 2: strand of work that banks are being pushed to do

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Speaker 2: in order to enhance competition make payments cheaper for customers.

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Speaker 2: So it's just it's a lot, and I think the

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Speaker 2: Reserve Bank would probably say, well, you can't just focus

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Speaker 2: on one. They reckon, we'll always need cash, And in

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Speaker 2: the Reserve banks view, the banks need a massive push

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Speaker 2: to service those customers because they reckon they won't just

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Speaker 2: do it by themselves.

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Speaker 1: Yeah, you know, that is a fascinating debate. I think

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Speaker 1: that's opening up here. Thank you for that genative trainee,

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Speaker 1: The Herald's Wellington Business editor.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 2: news talks that'd be from four pm weekdays, or follow

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Speaker 2: the podcast on iHeartRadio