The Press MONDAY, APRIL 1, 1963. Trading Banks And Small Savings

Press, Volume CII, Issue 30095, 1 April 1963, Page 14

The Press MONDAY, APRIL 1, 1963. Trading Banks And Small Savings

The trading banka are right to persist in their efforts to obtain permission to operate savings bank branches, not only in their own interest but in the interests of their customers. The Government, however. Should accede to their request, not because this is a normal branch of banking tn most countries but because it would be very tnuch in the national interest. The need for the greatest possible volume of small savings to provide New Zealand with capital for economic growth and to maintain internal stability is. of course, unquestionable. It is held by monetary authorities that the greater the opportunities for small savings the greater these savings will be; and, indeed. Common experience shows that to be true. The remarkable success of the new trustee savings banks, including that in Christchurch, is evidence of the truth of the proposition. Even more striking evidence can be found in the Australian states where trading banks w’ere allowed to enter this field in 1956. Trading banks could handle these additional savings With very little addition to overhead costs. They are peculiarly fitted to encourage small savings because they already have modern facilities in every

i town in New Zealand. They could offer the new service almost at a day’s notice without any more buildings or staff. One of the arguments used against permitting the trading banks to operate savings bank facilities is that trustee banks, with their local affiliations, have been particularly responsive to local needs. That, naturally, has been one of ■ the reasons for the popularity of trustee banks; and iit can be assumed that if trading banks wished to make a success of small savings they would have to adopt the same policy, as they have done in Australia. Savings facilities would be useful to many present customers of the trading banks, who may find the use of fixed deposits a cumbersome method of holding temporarily spare money and who might appreciate being able to do more of their business under one roof. That alone would be good public relations for the trading banks. A more important aspect may be that savings facilities would introduce new customers for other banking services. There is no reason to doubt that the trading banks would operate savings branches enthusiastically, thus contributing substantially to the national good as well as to their own progress.