The bank, which began operations in 1911, is now divided into separate organisations.
The central bank is separated from the old Commonwealth group of banking institutions and is reconstituted as the Reserve Bank of Australia.
The Commonwealth Banking Corporation is established under a separate board and with a separate staff with responsibilities for the Commonwealth Trading Bank of Australia, the Commonwealth Savings Bank of Australia and a new institution — the Commonwealth Development Bank of Australia.
In Melbourne, the Reserve Bank will open today at a temporary office next to the Commonwealth Bank main office in Collins Street, pending the erection of a building on the site of the old Occidental Hotel at the corner of Collins and Exhibition streets.
Branches of the bank will also open in Sydney, Brisbane, Adelaide, Perth, Hobart, Canberra, Launceston and in London.
The chairman of the corporation board (Mr. Warren D. McDonald) said yesterday he and his colleagues were honoured to accept the responsibility entrusted to them to control a banking group with such wide and important functions.
The board would endeavour to live up to its task of expanding and developing the business of the constituent banks in a manner consistent with its duty to direct the affairs of those banks to the greatest advantage of the people of Australia.
The early appointment of the members of the Corporation board under the Banking (Transitional Provisions) Act had enabled them to survey the operations of the trading bank and the savings bank and to plan the policy of the development bank.
He added that no immediate changes were contemplated in the policies of the Commonwealth Trading Bank and the Commonwealth Savings Bank.
The Governor of the Reserve Bank (Dr. N. C. Coombs) said yesterday the bank board would have the duty, as the Commonwealth Bank had, of ensuring within the limits of its powers, that the monetary and banking policy of the bank was directed to the greatest advantage of the people of Australia, and that the powers of the bank were used to promote the stability of the currency, the maintenance of full employment and the economic welfare of the people of Australia.
He said that as far as central banking in Australia was concerned there were two main measures — the Reserve Bank Act and the Banking Act.
Under the Reserve Bank Act, the original body known as the Commonwealth Bank continued in existence with the name Reserve Bank.
The Reserve Bank was the central bank of Australia and its functions would be essentially the same as those performed by the Commonwealth Bank and broadly its powers remained unchanged.
It would continue to operate the rural credits department which was concerned with the financing of marketing of primary produce.
The Banking Act substantially reenacted the existing Banking Act.
The chairman of the Australian Bankers’ Association (Mr. H. G. Ensten) said last night: ”Tomorrow begins a welcome new era in the history of Australian banking.
“Several principles vital to a free enterprise economy are embodied in the legislation, and the implementation of these should go a long way toward removing banking from the field of political controversy.
“We welcome the creation at long last of a central bank which has no trading bank affiliations.
“Our ready co-operation with the Reserve Bank is assured.
“Important as the changes are for the future of Australia, there will be no immediate resultant changes in credit policy as It affects the general public.”