Westpac has joined the roster of big banks which have recently retreated from the $425bn global remittance business, following rising regulatory compliance costs.
Australia’s No.2 lender by market value agreed to close remitters' accounts after 31 March, giving affiliated remittance firms more time to close their accounts. The lender also said it will provide money transfer operators time to come up with alternative banking arrangements before Westpac entirely closes its remittance services next year.
Westpac faced lawsuits in November from over 20 remittance firms to as they argued that the sudden closure could hurt their business.
"We asked Westpac to provide a reasonable time before they close the accounts. Now Westpac has agreed for March 31. At that time all accounts will close," Richard Mitry, a lawyer acting on behalf of remitters, told Reuters
Mitry added an appeal to contest the settlement is unlikely. It is subject to court approval on 24 December.
"We are continuing to work closely with the government, regulators and our customers to see what longer-term solutions may be possible to support and help make such payments in the future," Westpac said.
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