Reserve Bank closing Auckland branch

By BRIAN FALLOW

WELLINGTON - The Reserve Bank plans to close its branches in Auckland and Christchurch, casualties of the switch to polymer banknotes.

Deputy Governor Murray Sherwin said the Christchurch office, which employs 10 or 12 people, was expected to close mid-year and the Auckland branch, with about twice as many staff, towards the end of the year.

When the Reserve Bank moved into its building on the corner of Customs St and Fort St in the 1970s the bank was responsible for administering exchange controls and interest rate regulations.

As banker to Government departments it was called upon to cash public servants' pay cheques.

But now the branches exist only to store and process banknotes. They receive notes in from the banks and security firms, feed them through machines to check for authenticity and wear, then repackage them and send them out again.

Mr Sherwin said notes were passing through the Reserve Bank's hands much more often than necessary - about once a month in the case of $20 notes - especially since the switch from paper to polymer notes. The polymer notes were adopted because they are harder to forge and more durable.

"By encouraging banks with surpluses of cash to distribute them to banks which have shortages without their coming back on our premises I think we can get a win-win," Mr Sherwin said.

"It is likely other agents, particularly security companies which already collect a lot of currency from retailers for instance, will end up doing the sorting and distribution role."