The country’s biggest lenders will begin answering questions at a select committee inquiry from today. 1News looks at the reasons for the parliamentary grilling.
New Zealand’s banking sector has been under scrutiny for some time.
A Commerce Commission study into personal banking services earlier this year found there was little competition within a sector dominated by the big four Australian-owned banks.
It made 14 recommendations, including bringing in open banking and strengthening Kiwibank so it can offer “real competitive pressure” in the market. The Government said it would act on all of those recommendations.
At the same time, the Government said it was opening a select committee inquiry into the banking sector as part of the coalition agreement between National and NZ First – and would stretch this beyond personal banking services.
1News business correspondent Katie Bradford takes a look at the Commerce Commission’s final report. (Source: Breakfast)
So, what is the inquiry investigating?
Business banking and rural banking will be a particular focus for the select committee.
Earlier this year, Finance Minister Nicola Willis said growing the rural economy was important to rebuilding the country’s economy.
“With farmers’ satisfaction with banking services dropping in recent years, it’s critical we better understand the role of bank competition in that sector,” she said.
The inquiry will also look at barriers preventing competition within the sector, such as restrictions on new entrants and any constraints on the use of technology and open banking.
Lending to Māori organisations, businesses and individuals will come under the microscope, too.
This includes the experiences they have accessing banking products. A Reserve Bank paper showed Māori are under-represented in business ownership, suggesting there are factors holding back Māori start-ups. The inquiry will also investigate whether bank procedures are contributing to Māori having disproportionately low rates of home ownership.
Finance Minister Nicola Willis seeks a parliamentary inquiry into whether Kiwis are getting a fair deal. (Source: 1News)
Who is going before the select committee?
The Finance and Expenditure Committee begins its public hearings on the inquiry this week.
The committee says it received more than 140 written submissions on the inquiry, with more than 60 submitters asking to speak at the public hearings.
One of those hearings will be focused on rural communities and agricultural lending.
ANZ’s leaders are due to appear at Parliament today, while ASB and Westpac are scheduled to go before the select committee next month. BNZ and Kiwibank will then front up in December.
