EXCHANGE ON CHEQUES

Press, Volume XCIV, Issue 28100, 16 October 1956, Page 12

EXCHANGE ON CHEQUES

“MOST DIFFICULT” TO REPLACE BANKS’ ANSWER TO MANUFACTURERS The Associated Banks believe it would be “most difficult” to replace the existing system of exchange on cheques by substituting a service charge. Advice to this effect was received last night by the Canterbury Manufacturers’ Association from the New Zealand Manufacturers’ Federation. The local association had asked the federation to ask the Associated Banks to give effect to the proposal of the Monetary Commission that exchange on cheques should be discontinued and the banks reimbursed by an appropriate charge for keeping accounts.

‘‘l think it is a very unrealistic answer to a very realistic problem.” said the president (Mr A. H. Lee) when the banks’ afiswer was received last evening. “In considering this matter the Associated Banks fully appreciated the work involved both to the trading community and the banks in collecting inland revenue on cheques, but they are satisfied that at this stage the replacement of the inland exchange charge by service charges would be most difficult to implement, and could prove very expensive indeed to the commercial community,” said a statement by the chairman of Associated Banks. Maximum Charge “The banks believe the present charge of 10s a half-year is the maximum which the bulk of their customers would be prepared to pay for cheque account facilities,” said the statement. The council decided to ask the federation to take up the issue again at the earliest opportunity. Mr D. W. Thomas said the banks should be told that the association did not wish to rob them of revenue but that they wanted more equitable charges. Mr Lee said he contended that for firms trading on a national basis exchange was a costly charge. He said he thought it cost the firm with which he was associated about £3OOO a year, apart from the work involved. They wanted a more equitable arrangement of charges.

“Everyone here seems to think the banks are there to render a service to the community,” said Mr H C. Urlwin. “They are not. They are there to make a profit. This is a nice easy way of making revenue.”