The Press SATURDAY, FEBRUARY 8, 1969. Better Banking Service

Press, Volume CIX, Issue 31908, 8 February 1969, Page 12

The Press SATURDAY, FEBRUARY 8, 1969. Better Banking Service

Mr W. A. Fraser, the member of Parliament for St Kilda, has some curious objections to the transfer services that the trading banks propose to handle by a computer network. He feels that the Post Office Savings Bank has been prevented from enjoying the stimulus of a giro system for transferring money and that the wrong people—the shareholders of the trading banks—are going to reap profits that belong elsewhere. The Government, he has said, should not have allowed the trading banks to monopolise the computer system of transferring money. In fact, there is no private monopoly in banking. Banking is competitive and, of the total New Zealand banking operation, nearly half is publicly owned. Clients make their own choice of bank service. The Post Office Savings Bank needs a stimulus, says Mr Fraser, and in the last four years the excess of deposits over withdrawals has “ slumped ” by Ssom. The figure is correct; but in the whole picture of small savings it is not especially meaningful. The Post Office has a smaller share of total savings than it had four years ago—when the private savings banks got under way—and a smaller share than it had before the multiplication of trustee savings banks, of whose association Mr Fraser, ironically, is a former president Since 1964 the Post Office’s share of total savings has fallen from 78 per cent to about 60 per cent and the trustee banks have increased their share from a fifth to a quarter. Mr Fraser’s “ slump ” means that Post Office clients have been adding less to their deposits, they have been spending their savings at a higher rate (and there have been some “ rainy days ” in the last three years), or they have transferred their money to other institutions. For all this, Post Office savings have grown every year and the total of small savings in all banks has been increasing at the unprecedented rate of about sloom a year. Stimulated by the competition from the new banks, the savings banks have been fulfilling their purpose notably well. Technically, there seems to be. no reason why the community-owned savings banks should not join the computer transfer system of the trading banks. One certain result would be that the savings banks would not be able to meet the cost of operating a transfer system and also pay their present rates of interest on all savings. A likely result would be that the savings banks would lose their prime function as promoters of savings. No-one should imagine that the weH-tried, but obsolete giro system as operated in, say, Britain, is an integral part of the Post Office Savings Bank there Nor does there seem to be room for two transfer networks in New Zealand. If sOTneatnens resent any private profit being made out of the Oeuer services they are given by banks they c< become clients of the State-owned trading tank. That, surely. would meet Mr Fraser’s main he annarently overlooks the leading part being played P by the’ Bank cd New Zealand in the computer plan.