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ISCOVER
Staff Reporter
Bankmecu has called on the federal government to increase competition in the Australian banking sector.
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In a letter to the treasurer and the chairs of APRA, ASIC and the ACCC today, bankmecu raises the need for greater transparency when it comes to the multi-brand strategies being pursued by the country’s major banks.
According to bankmecu’s managing director Damien Walsh, there is growing concern that the major banks are creating a veneer of competition through their various sub-brands, and that consumers should expect greater disclosure of the facts.
"What many consumers don’t know is that if they have deposits adding up to more than $250,000 spread across a bank and its various sub-brands - for example with Westpac, St George, Bank of Melbourne, BankSA and RAMS - they are only protected up to the $250,000 limit,” he said.
The current Financial Claim Scheme protects deposits of up to $250,000 per customer per Authorised Deposit Taking Institution and these wholly owned sub-brands are not separate banking institutions.
"The government’s ongoing $250,000 deposit guarantee has been, and continues to be, an invaluable measure that has strengthened consumer confidence in the country’s financial institutions,” Mr Walsh said.
"However, there is no evidence that the details of how this deposit protection applies across bank sub-brands is being disclosed to consumers by the relevant banks nor is the information readily available on consumer or regulator websites.
"In fact, a survey of more than 1,000 Australians conducted by bankmecu last week showed one in four people thought deposits over $250,000 held in banking sub-brands would be guaranteed. Nearly 50 per cent didn’t know,” Mr Walsh said.
The letter to the treasurer follows a Senate Committee report released last week which suggested competition in the banking sector had been unduly eroded in the name of stability following the GFC and called for an independent inquiry into the banking sector.
