Govt help urged for rural banking

Press, 17 May 1989, Page 2

Govt help urged for rural banking

By

PETER LUKE

in Wellington

Government subsidies should be used to reinstate banking services in isolated areas where the withdrawal of Postßank had caused “unreasonable” hardship, a Parliamentary Select Committee has recommended. The Communications and Road Safety Committee said that reasonable access to a basic banking service was a fundamental need in any community — regardless of location. “The committee believes that the effects of Postßank closures on some isolated rural areas

have been so severe and so socially disruptive that a service must be reinstated.” Among the isolated settlements visited last year by the committee were Karamea and Granity, on the West Coast. The associate Minister for State-owned Enterprises, Mr Peter Neilson, yesterday acknowledged that it must consider supporting a limited form of banking services “in a few very remote areas.” Mr Neilson praised the committee’s recognition that services rather than “bricks and mortar” were needed. “As the report shows, those basic bank-

ing services can be provided without reopening post offices.” Most communities had found ways to organise the distribution of cash, he said. Mr Neilson said that the Government would require time to consider the committee’s recommendations and how best the banking needs of remote rural communities could be met. The committee found that while many beneficiaries were able to “access” their benefits, it might involve spending a significant part of the benefit on travel. It noted that Granity was one of 12 special areas, designated

by the Health Department to receive free medical treatment, with salaried doctors provided through the department. In its interim report, the committee had questioned the extent to which the statutory social objective was reflected in Postßank services. Since the sale of the S.O.E. there was no longer a statutory requirement for providing a banking service which showed a sense of social responsibility, said the committee. It considered seven options for providing a minimum banking service in isolated areas ranging from bank branches to a “locked box.”