Governor of Eesti Pank Ardo Hansson said that the Omniva cash service is a good example of a flexible solution that can be used to provide important services to people living in rural areas.

“The service provided by Omniva, the postal company, is to be praised, because it will give people all over Estonia access to cash. This is a sensible and flexible solution”, he said.

In September last year Mr Hansson answered an interpellation by members of the Riigikogu about the accessibility of banking services in Estonia. One point that he raised was the flexible solutions that have been tried in other countries to supply cash to rural areas.

“Last year in the Riigikogu I spoke on the same subject and said that I am certain that the commercial banks in particular, though also the state, should be able to provide better solutions than has been the case so far. The state has taken the first step, through Omniva, though it ought not to be the final step in improving matters”, he noted.

He added that the commercial banks do need to explain their vision for access to banking services more clearly than they have done so far, and they should themselves arrive at a solution that is acceptable to society.

Excerpts from Ardo Hansson’s speech to the Riigikogu in September 2014:

“In short, the position of Eesti Pank is that the guiding principle for the provision of cash and banking services across Estonia is that it should make economic sense. At the same time, every person in Estonia must have access to banking services, and so we must find alternative flexible solutions in Estonia.

I do not conclude that the commercial banks ought to maintain an unnecessarily large network of branch offices and cash machines. There is no real difference here whether such a network is supported by the clients of the banks or by the Estonian taxpayer, in any case it is an unreasonably expensive solution.

That said, the commercial banks do need to explain their vision for access to banking services more clearly than they have done so far, and they should themselves arrive at a solution that is acceptable to society.

I can suggest some options drawn from the experience of other countries, which the banks and the government may want to consider during their discussions on the accessibility of banking services:

• A cashback system in shops – when paying for their food in shops by card, people can add some extra to the total amount paid and then get that in cash from the shop. For this to work, the commercial banks need to allow shopkeepers to offer this service without charging them any percentage of the cash that is withdrawn. The banks would gain by having a more efficient cash network, shopkeepers would gain additional clients in their shops, and those clients would benefit by being able to withdraw cash more conveniently and securely.
  
• State service points – offices providing a wide range of services from the state, the banks and other enterprises, all in one place. This would allow people in rural areas to make payments at regular intervals, and get cash, medicines, letters and newspapers and other services. Cash and medicines would probably need to be ordered in advance, but this would bring the services closer to people. This would make more sense for the state and for companies than maintaining separate offices, each dedicated to only one service.
  
• A state tender for services – the state can use a joint tender run by the central government, a state company or local government for provision of banking services in rural areas. The Swedish post and telecoms operator PTS used this approach by running a state tender in 2008 at the request of the government to supply 15 local authorities and 73 districts around the country with cash.
  
• Requirements, or best practice guidelines that are generally adhered to, for the closure of bank branches, especially in rural areas – Canada has requirements for closing local bank branches and the banking association in Australia has set out the best practice for closing branches there.
  
• Joint work by local governments and banks to train people – this is where banks offer regular training in the use of internet banks in the style of the Vaata Maailma project that ran earlier. Local authorities help in deciding who needs training and bring together everyone interested, and the banks provide the people, computers and knowledge for the courses.
  
• Joint work by local governments and banks to provide cash – the commercial banks help local authorities provide cash and payment services to people who have impaired mobility or difficulty using a computer. This could be particularly useful in helping elderly people or people with impaired mobility or vision. Local authorities can establish who in their area has such difficulties and then they can provide help by delivering cash to homes or help with paying electricity bills and so on.

For further information:
Viljar Rääsk
Public Relations Office
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