The Reserve Bank keeps inflation in check, oversees the financial system, regulates banks and issues the country’s currency. These are important jobs, defined by Parliament. Nowhere among them does it say: decide where banks must put their ATMs. 

But that is what the Bank is now attempting. It wants banks to establish more than 1,200 cash service sites across the country, at an estimated annual cost of $104 million. An 84-page consultation document details coverage maps and cost projections. What it conspicuously lacks is a legal basis for any of it. 

This is not a grey area. Parliament had the opportunity to grant the Reserve Bank powers to compel banks to provide cash services. It chose not to. 

The Bank pressed on regardless. Its consultation opened in February. When questions arose about its authority, it extended the submission deadline to July. 

On Sunday, three days after the original deadline passed, Reserve Bank Governor Anna Breman appeared on TVNZ’s Q+A. Jack Tame asked whether the Bank has the power to do what it proposes. Breman could not confirm it. She promised an answer “within a couple of weeks.” 

A regulator that cannot tell the public whether its own proposal is lawful has more than a timing problem. It has a problem of overreach. 

The Reserve Bank could not compel banks to run postal services from their branches. It could not order them to sell insurance or open cafes. Everyone can see why: these things have nothing to do with the Bank’s job. 

Telling banks where to place their cash access points is no different in principle. It is just less obviously absurd, which makes it more dangerous. 

Governor Breman has said she hopes banks will set up a voluntary scheme for rural cash services. But how voluntary is a scheme your regulator is pushing you into? When the institution that grants your banking licence expresses a “hope,” banks know that hope carries weight no ordinary suggestion does. 

The Reserve Bank is operationally independent from politics for good reason. But that independence comes with a condition: the Bank must stay within the boundaries Parliament chooses to give it. A central bank that rejects those boundaries is not independent. It is unaccountable. 

Finance Minister Nicola Willis should be asking how this consultation went out without anyone first checking the Bank’s legal authority. That was a governance failure. It needs to be put right.