The Port Fairy Community Bank's ability to support community groups will be affected by a state government policy.
Member for South West Coast Roma Britnell said the state government's centralised purchasing policy would leave local community banks out in the cold in favour of the big four.
Ms Britnell called on the government to make changes to the policy to allow organisations to maintain accounts with their local community bank branches.
"In places like Port Fairy and Heywood, state-government based agencies like the hospital and schools will have to move their accounts from the local community bank and instead bank with the Sydney-based Westpac," she said.
Ms Britnell said it was shameful the state government was taking away some of the largest accounts of these community bank branches which are run by locals and contribute profits back into the local community.
Belfast Community Enterprises Limited company secretary Ashley King said the policy would affect the community bank's ability to give back to local organisations.
"It will mean a loss of revenue and opportunity to grow the business, therefore there will be less funding available to invest in the community," Mr King said.
He said the bank, which had been operating for seven years, had reinvested more than $500,000 into 100 clubs and organisations.
"If it wasn't for the vision to establish a community bank back then, the town would have been left without a bank that provides a full range of banking services and products," Mr King said.
He said he believed a number of groups would be forced to open an account at another bank if the state government didn't change the policy.
"I think it's fair to say we have several customers and organisations which will be impacted by this," Mr King said.
Ms Britnell said the government's purchasing contract once again showed the city centric, centralised nature of how Labor operates.
"Instead of supporting local organisations that give back to local groups and organisations, the government is rewarding the big four banks, who have done nothing but abandon rural and regional towns across the state," she said.
"This policy needs to be reviewed so vital community banks which serve their communities aren't disadvantaged and I call on the treasurer to do so with a level of urgency."
The Port Fairy Community Bank is the only remaining branch in Port Fairy.
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