New Zealand will conduct an inquiry to assess competition in the country’s banking sector, with a focus on services in rural areas, Finance Minister Nicola Willis said on Wednesday.
The decision follows an initial report by the country’s competition watchdog in March that New Zealand’s big four banks offer limited competition to personal banking and that a focus on maintaining margins has led to insufficient investment in technology and limited innovation.
New Zealand’s four largest banks – ANZ Bank New Zealand, ASB Bank, Bank of New Zealand and Westpac New Zealand – are owned by the “Big Four” Australian banks. According to official data, they account for 85% of mortgage and other loans and about 90% of deposits.
“Encouraging stronger competition in the banking sector is essential to rebuilding the economy,” Willis said in a statement.
The Parliament’s Finance and Expenditure Committee will lead the inquiry, along with an agriculture-focused committee to determine the scope of the inquiry and prepare a report on rural banking.
“Growing the rural economy is critical to rebuilding New Zealand’s economy and as banking services have declined in recent years, it is vital that we better understand the role of banking competition,” Willis said.
He said the Niti Aayog would investigate the banks’ allegations and may ask their chairmen and CEOs to appear before the commission.
According to a Central Bank report last year, New Zealand’s agriculture sector accounts for 11% of the country’s bank debt.
“Typical beer advocate. Future teen idol. Unapologetic tv practitioner. Music trailblazer.”