Westpac is resisting calls for greater scrutiny over regional branch closures, as bank executives prepare to face a federal inquiry into rapidly increasing shut downs.
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The Senate inquiry into bank closures across country Australia will hold three hearings in Launceston, Canberra and Junee, in regional NSW, this week.
The committee is examining the impact of more than 650 closures since 2017, which have left many residents fearing for the future of their small towns.
Community groups, councils and the farming sector argue banks have a social responsibility to rural areas, which rely on cash and face-to-face banking for big business, tourism, local events, sport and fundraisers.
But the major banks maintain there has been a continued decline in foot traffic in all branches and a huge uptake of digital services, particularly since COVID-19 lockdowns.
In a recent submission to the inquiry, Westpac said over-the-counter transactions in regional branches decreased by 39 per cent in the last five years.
The bank said 96 per cent of its transactions were digital due to customer demand, a trend it said was also reflected in the federal government offering online options for Medicare, Centrelink and tax.
The inquiry's previous hearings have been told major banks did not give adequate notice of branch closures and there should be mandated community consultation periods.
But Westpac said community engagement was not viable and risked exposing the bank's sensitive commercial information to competitors.
"We are not aware of any commercial entity in Australia where the general public plays a role in commercial decision-making," its submission said.
"Our democratic process allows the general public to reflect their views on decisions of government through the ballot box, and in the private sector customers vote with their feet by choosing where to bank.
"There doesn't appear to be a clear rationale in government inserting itself into that process by way of further regulation."
The chief executives of Westpac, the Commonwealth Bank and the National Australia Bank are due to face the inquiry at Parliament House on Wednesday.
Regional managers from the major banks have appeared at previous hearings.
The Australian Banking Association chief executive Anna Bligh is also set to appear, ahead of Finance Sector Union representatives.
The committee will hold a hearing in Launceston, in northern Tasmania, on Tuesday morning, with evidence from councils, business chambers and community organisations.
A submission from Tasmanian Women in Agriculture, a not-for-profit that advocates for rural and remote communities, said many families relied on extra money from cash sales of produce at their farm gates.
"This important poverty-reducing source of household income would be hampered without nearby cash handling facilities," the organisation's submission said.
Tasmanians may even resort to other measures like bartering, which would result in lower tax income, the group said.
The Senate committee will travel to Junee on Thursday to hear from the NSW Riverina town that successfully fought to postpone the closure of its last bank earlier this year.
Australian Associated Press