Government's new bank rules
COMMUNITY banks have been excluded from the State Government’s new five-year state purchasing contract.
Government agencies including schools, kindergartens and health facilities will be required to bank with one of three major banks from October 1.
But the move is seen as a blow to rural communities served by community banks.
“It makes sense for local bodies and organisations to have the opportunity to be part of their own community bank,” said Ingle-wood and District Community Bank chairman Murray Baud.
“We are a community bank that brings benefits to local communities and organisations across the Loddon, returning funds to benefit the community in many ways through our sponsorships and grants programs.”
Western Victoria Region MP Bev McArthur, who raised the change in State Parliament, said many organisations continued with accounts at a community bank because the old tender was not strictly enforced.
“But the October mandate changes all that,” she said.
Loddon Shire said it used Westpac for core banking and sought the best rates for other investments. “The Local Government Act does not stipulate that council must bank with only one of these three banks,” it said.
A Government spokesperson said: “The new Banking and Financial Services State Purchase Contract ... expands the current arrangement from one supplier to a panel arrangement.. This panel arrangement means that Government agencies will be able to access a much larger number of bank branches in their local communities.”