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Bank with No Monthly Charges And No Min Balance Required. Sign up today! Australia’s banking regulator says it had no cognition of the Bank of Queensland’s controversial fresh savings account that offers tickets in a monthly lottery rather than a higher interest rate, despite claims it had approved it. The account has been criticized for supporting gambling because it requires customers to forgo an ordinary 3.5 per cent in annual interest for the chance to win $20,000 a month. In standing up for the account yesterday, Bank of Queensland (BoQ) chief executive David Liddy said the corporation had gone through two years of examination and been approved by the Australian Prudential Regulation Authority, as well as and state lottery commissions.

Advertisement: Report continues beneath But an APRA spokesperson said the regulator had just learned about the product the previous day. It had not accepted the account, nor was it necessary to. BoQ chief operating officer Ram Kangatharan was forced to defend his boss, who was on a airplane when the discovery was made. Mr Kangatharan apologized and said Mr Liddy had been incorrect. Nonetheless, he said the account had been granted the go ahead by the relevant state and territory lottery commissions, who regulated savings accounts with trade promotions. “We can essentially go ahead with it,” Mr Kangatharan said.

Customer and anti-gambling advocates flagged legal activeness within hours of the product being revealed at the bank’s entire-year profit announcement in Brisbane yesterday, as revealed exclusively by brisbanetimes.com.au today. Independent Senator Nick Xenophon, who staunchly opposes gaming, also spoke out about the account today. Mr Xenophon said he would prosecute authorities to enlighten why the product was approved and he intended to bring up the issue in Senate Estimates the following week. The Win Account, to be launched on November 15, will be the beginning of its kind in Australia and is based on parallel products in New Zealand.

It has little fees and offers an yearly interest rate of 1 per cent, compared to most other savings accounts that present about 4.5 per cent. Customers will be lured to the Win Account on the chance they can win the $20,000 first award in a monthly lottery, with an initial total prize pool of $30,000. When a minimum $250 is deposited, each dollar in the account will make a ticket in the lottery. But a customer who deposits $1000 into the account stands to lose about $35 per year in interest. Consumer groups GetUp! and Choice, which are already pursuing class activity against 12 banks for what it claims are dishonest charges, have mooted uniting action against Bank of Queensland.

Choice spokesman Christopher Zinn said the account was “unreliable” and would encourage gambling, while GetUp! described it as an “unethical” banking practice. The Salvation Army’s head of trouble gambling services, Gerard Byrne, said the product was improbable to impact existent problem gamblers, who generally did not save money. Nonetheless, it would ultimately propel new gamblers. Mr Liddy said yesterday the bank had created the account because it was not able to offer competitive interest rates compared to the big four. He rejected suggestions it would encourage gaming. “It’s not gambling. You’re putting your money securely in a bank and being eventually rewarded … you’re not putting your money at risk at all,” Mr Liddy said. “It’s a out of the ordinary account that will be of interest to some people and some it won’t. We’re not trying to dictate to people what they do, people will make that selection. “All our market inquiry and the behaviour of the merchandise in other markets suggests many people will adore it, others won’t touch it.”