BANKING ACCOUNTS

King Country Chronicle, Volume XXVII, Issue 4461, 24 October 1933, Page 5

BANKING ACCOUNTS

CHARGES FOR BOOK-KEEPING. A statement that the banks are prepared to revert to the former charge of 10s per annum for keepingcurrent accounts when the Government reduces the note tax to the old rate of 3 per cent., is made by the chairman of the Associated Banks, Mr. J. T. Grose, in a letter received by the New Zealand Farmers' Union. At its last conference the union decided to ask the banks to reduce their book-keeping fee from £1 to 10s, in reply to which Mr. Grose states that this" cannot be done at the present time, and in existing circumstances. The banks, wrote Mr. Grose, provided their many services to the community for a return (by way Of interest and other charges), which provided them with a very narrow margin over working expenses. "On the other hand, the banks are required to pay income tax, not on actual income earned as other companies do, but on an assumed income assessed on an arbitrary basis which bears no relation to the actual income earned. This inequitable method of assessment is particularly burdensome in time of depression since it takes no account of reduced incomes earned.

"Nevertheless, it may be pointed out that the bank charge of £1 per annum is lower than similar charges in some other countries; for example, in Canada, where bank charges (and interest rates on farmers' advances also) are considerably higher than in New Zealand, a customer who draws, say, four cheques weekly might pay up to £3 15s per annum by way of bank charge. The £1 charge at present made by the banks in this country covers cost of clerical work and stationery (including cheque books, bank statement forms, and ledger space), and the charge is moderate for the services rendered. "When the Government increased the note tax from 3 per cent, to 4% per cent., the banks, to cover this increased expenditure, raised the charge for keeping current accounts from 10s to the present rate of £1 per annum, and they are prepared to revert to the former charge when the Government reduces the note tax to the old rate of 3 per cent., and the Government has been so advised."