New rules may lead to higher bank fees

Thursday 4 November 2004

Bank customers could face higher charges to make up for the tens of millions of dollars banks may have to spend because of planned rules on "outsourcing" services such as account processing.

By The Landlord

The Reserve Bank published yesterday its proposed policy on outsourcing by large banks registered in New Zealand, covering IT processing, accounting and call centres.

The proposed policy would require a large bank's board of directors to have the legal and practical ability to operate their bank standalone if the bank's owner, or another provider of services to the bank, failed.

"The Reserve Bank is not against outsourcing per se, and sees it as part of the fabric of the global financial system," Reserve Bank deputy governor Adrian Orr said.

"However, outsourcing can expose banks, and hence New Zealand's financial system as a whole, to risks that must be managed."

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