Roger Beaumont, NZBA chief executive, called the decision, “a step in the right direction towards a more sustainable resilient cash system”. He said it was “disappointing” that banks were not allowed to start negotiating collectively in November, which he called a critical time for individual negotiations.

While it was disappointing banks were not allowed to start negotiating collectively in November at a critical time in some individual negotiations, they would continue to work with the Commission through the final stage of this authorisation process, with the aim of ensuring efficient continuity of critical cash services.

He said it had come as a “huge surprise,” adding that banks had been working on ways to ensure customers who still used cash could access it even ​as demand declines and were working with members to respond to the consultation.

The New Zealand Banking Association said it appreciated that the RBNZ’s proposed MoU would continue to allow banks to develop their own solutions to improve access to bank accounts.

Last week, the New Zealand Banking Association (NZBA) criticised RBNZ’s proposals for a minimum cash-services standard as “extreme” and labelled it a “back-to-the-future solution”.

New Zealand Banking Association chief executive Roger Beaumont told NewstalkZB that the consultation’s content was “completely out of the blue”.

New Zealand Banking Association chief executive Roger Beaumont said customers would carry the cost of the “extreme” and “back to the future” measures the Reserve Bank wanted to take.

Earlier, Banking Association CEO Roger Beaumont told Newstalk ZB’s Mike Hosking the “curious” proposal had come “completely out of the blue. It’s kind of back to the future. It’s almost like Sport New Zealand demanding that jazzercise and leg warmers make a comeback without any appreciation of customer preferences, let alone demand,” he said.

But Banking Association Chief Executive Roger Beaumont told Mike Hosking customers are moving towards digital payment methods.  He says they’re using apps or online banking, rather than going to punch in a pin at an ATM to buy an ice-cream from the dairy.

“Banks agree that cash use should be preserved for those customers who need it, but this proposal is extreme. This is a back to the future solution,” he said.