The Finance and Expenditure Committee is now taking submissions for its inquiry into banking competition, with a particular focus on rural banking, as part of its ongoing efforts to ensure fair and competitive banking practices, says National MP Stuart Smith.

“We want to ensure that the profits banks are making are justified and comparable to banks in similar jurisdictions, particularly in rural banking and if not, why not,” says Smith, who is Chair of the Government’s Finance & Expenditure Select Committee.

The inquiry aims to ensure New Zealanders have access to bank services at competitive prices and that the regulations and settings imposed by regulators, such as the Reserve Bank, are not unduly influencing the cost of borrowing.

The committee will explore whether the capital requirements imposed on banks are unnecessarily driving up the cost of borrowing and assess any barriers preventing new competitors from entering the banking sector.

“This inquiry comes at a critical time for farmers, who are facing tough conditions, especially after recent droughts.

“The committee seeks to address concerns that rural communities may be paying more than they should for banking services.

“We want to ensure that the capital requirements of banks are not causing the cost of borrowing to be higher than it needs to be. We also want to ensure that returns of equity in the rural banking sector are aligned with risk and are similar to other jurisdictions.

“We encourage all stakeholders, including bank representatives and rural community members, to make a submission.”

To participate, please visit the Parliament website.

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