Stevens gives ATM reforms a tick

As the Greens attempt to legislate for restrictions on ATM fees, Reserve Bank of Australia governor Glenn Stevens has signalled the RBA believes ATMs do not need major reform.

The Greens proposals part of the party's package of banking reforms backed last week by
federal lower-house independent MPs Bob Katter, Rob Oakeshott, Andrew Wilkie and Tony Windsor and semi-independent WA National Tony Crook.

But in evidence to the federal House of Representatives Economics Committee on Friday, Stevens described recent ATM reforms as providing "a pretty reasonable outcome".

March 2009 reforms by the RBA abolished interchange fees and exposed ATM fees to ATM users. Those reforms aimed to make the charges more visible, encourage competition and put more ATMs in more locations.

Stevens said the result was that "nobody pays a fee for using their own bank's ATM, just about everybody has access to a reasonably substantial network that will give them a fee-free withdrawal, people have responded to knowing what the foreign fee is going to be by changing their behaviour and there has been a marked increase in the proportion of transactions done at own-bank and a corresponding fall in transactions at foreign machines."

The aggregate saving in fees resulting from that was about $120 million a year across the community, he said, and and there wereabout six per cent more machines in existence across the country than there had been when the changes took effect.

The Greens' proposal provides that transactions at a bank's own-branded ATMs are to be free of charge, and caps charges for the use of a bank's ATMs by customers of another institution at the "reasonable costs" of providing the service. APRA would have to calculate the banks' costs and approve all ATM fees.