Financial Services

The Reserve Bank provides a range of banking services to the Australian Government and its agencies, overseas central banks and official institutions. Principal amongst these is management of the Australian Government's core accounts. Also important are transactional banking services which are provided to some 90 government agencies on a commercial basis.

Management of the Government's core accounts is a responsibility that derives from the Bank's role as the nation's central bank and requires the Bank to manage the consolidation of the Australian Government agency account balances. The transactional banking services are associated with more conventional banking activities, such as making and receiving payments. A number of services are available to Government agencies to make payments – such as direct entry, New Payments Platform (NPP), eftpos and the real time gross settlement system. Services that enable government agencies to receive funds include electronic funds transfer, BPAY®, NPP, eftpos, along with card-based services via phone and the internet.


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Many people are aware of the Reserve Bank's role in setting monetary policy, and in particular in the cash rate target announcements that occur every month. What many people aren't aware of, however, is the Bank also provides banking services; it is in actual fact a bank. The Bank's principles customers are other central banks, overseas international organisations such as the Organisation for Economic Cooperation and Development. But our most important banking customer is in fact the Australian government and the various agencies and departments of the government. At a very high level there are two parts to our banking services, our core banking service and our transactional banking service.

Core banking service is a service that's very similar to what we would find if we looked at many other central banks around the world. It is essentially a service whereby the Reserve Bank maintains the government's core set of accounts, this is around half a dozen accounts that the government holds, through which almost all of its payments and receipts flow. Money is moved into, and out of, the core bank accounts on a daily basis and on average each day around three billion flows out and roughly the same amount moves back in again.

It's very important for the government to ensure that the payments that it makes go out on time and that the money that it's expecting to receive comes in on time as well. It's important for those systems to ensure that the movement of funds is just on time, the systems themselves are sophisticated enough to ensure that the government doesn't have idle balances sitting around and that its payments are made just when the government intends to make them.

Transactional banking services is more the kinds of service that you would see in a commercial bank whereby various customers hold accounts and the Bank will facilitate movements in and out of those accounts. So the Reserve Bank provides accounts for various government departments and agencies and will facilitate the process of moving funds in and out of those accounts. The transactional banking service is unique compared to the core banking service in that we are required to compete with the commercial banks to provide that service.

On an annual basis there are around 350 million transactions through our transactional banking service with a total value, over the course of the year, of just under a trillion dollars. The kinds of payments and transactions that occur through the transactional banking services are the ones that many people in the public would probably be aware of. They include pension payments, social security benefits, child support transactions. They go through the Reserve Bank's banking service, and also emergency payments, so in times of natural disasters for example, when the government is keen to ensure that victims of natural disasters have access to funds in order for them to purchase food and other items, emergency payments will flow through the Reserve Bank's transactional banking system.