Banks’ profit on everyday accounts to come under scrutiny

It will write to banks asking them to voluntarily disclose this information to provide more transparency and incentive to do better.

Commerce Minister Scott Simpson will also ask the Financial Markets Authority (FMA) to investigate transaction account pricing by using fair conduct principles under the Conduct of Financial Institutions (CoFI) regime to judge whether customers are being treated fairly, although it cannot force the FMA, an independent regulator, to do this.

When banks were asked to disclose the pricing of transaction and on-call savings accounts at the banking competition inquiry launched in June last year by the FEC and Primary Production Committee, most objected citing commercial sensitivity.  

To improve transparency and competition, the FEC wanted to know how much profit the banks were making from everyday depositors who are effectively subsidising lending margins.