Central Bank paper: ‘We have responsibility to ensure cash available’
The Reserve Bank is asking about the future of cash and reveals the number of ATMs is declining, plus its bank vaults are ageing and "sub-optimal".
The central bank has issued a paper on the future of the cash system, in which it proposes being given the legal responsibility for ensuring New Zealand continues to have an effective cash system.
Assistant Governor Christian Hawkesby said the Reserve Bank was a cog in a cash system machine, which included the banks, security firms that deliver cash, retailers, and automated teller machines (ATMs).
"We see roles for all parts of the system - along with interest groups, whānau and individuals - in ensuring people who want or need to access or use cash can do so," he said.
A recent RBNZ survey has found cash continued to be widely used and essential to a wide range of people, as well in the Pacific where the New Zealand dollar is the local currency.
The paper suggests the central bank have responsibility to ensure cash is available, even if it adds costs to other groups such as banks, and retailers who handle cash.
It said the number of ATMs owned by the five biggest banks has dropped 8.1 percent between 2010 and 2017, but the number of independent non-bank ATMs has risen in high needs areas, such as rural communities.
"We expect to see even greater changes in the cash system over time," the report said.
"If the demand for cash for transactional purposes continues to decline, the extent to which these businesses can continue to supply cash to the public profitably is uncertain."
There is no legal requirement for retailers to accept cash as payment for goods and services, although it must be accepted for a debt payment.
The RBNZ also wants powers to ensure banks continue to provide access to cash deposits and withdrawals in the longer term.
"There is no clear evidence that cash access is declining or that the needs of the public cannot continue to be met by a coordinated industry effort - however, we believe it sensible that legislation provide for intervention if required."
The central bank is the centre of the national cash distribution system but says it likely needs new secure facilities.
"Our bank vaults in Wellington are ageing and we think the current arrangement is sub-optimal, with the Reserve Bank holding a large proportion of the country's banknotes and coins in Wellington," it says, adding that the Reserve Bank will work with stakeholders over the next year to 18 months to come up with a plan to address the issues.
The RBNZ consultation document is open for public comment and feedback for the next month.
This article was originally published on RNZ and re-published with permission.
Help us create a sustainable future for independent local journalism
As New Zealand moves from crisis to recovery mode the need to support local industry has been brought into sharp relief.
As our journalists work to ask the hard questions about our recovery, we also look to you, our readers for support. Reader donations are critical to what we do. If you can help us, please click the button to ensure we can continue to provide quality independent journalism you can trust.