Further unease from the big banks about the 10 basis point fee they will have to pay for the government's retail deposit guarantee has forced Treasury and the Reserve Bank back to the drawing board to hammer out the details of how the fee is calculated.

Banking sources have told interest.co.nz some of the banks were last week reconsidering opting in to the scheme quickly because of concerns about the fee, which is being charged at 10 basis points for total guaranteed deposits above a NZ$5 billion threshold.

The big banks see the fee, which is not paid by smaller and lower rated institutions on their existing deposits, as a subsidy for weaker competitors. They are also concerned the government has already banked and spent the proceeds in a series of election campaign announcements.

Treasury Deputy Secretary Peter Bushnell said Treasury was working with the big banks to iron out the details of the scheme, particularly around how the NZ$5 billion is calculated.

"The complication for them is they have to estimate exactly how much they're liable for. They know their deposits, but the complicating thing for them is how many people fall over the NZ$1 million limit," Bushnell told Radio New Zealand.

"That estimate they make has a square up at the end of say five and a half months. What we want to do is get a common approach with them so it's similar for all the banks," he said.

Later a spokeswoman quoted him via email as saying:

"We are conscious that the big 4 banks are exposed to the largest dollar value of fees under the retail scheme, and therefore have agreed to work with them to develop a common methodology for estimating the fee liability. Such agreement will prevent materially different interpretations being taken by different banks," Bushnell said.

"The fee of 10 basis points is charged on the guaranteed amount exceeding NZ$5 billion. As you know, we announced a guarantee cap of NZ$1 million per individual/account "“ so the calculation of the fee that the big 4 banks pay becomes more complicated. We will be working with those banks quickly to develop and agree the common methodology for this calculation."

Meanwhile Westpac lodged its formal application to join the scheme on Monday and BNZ expects to lodge its application on Tuesday. ANZ National and ASB have yet to apply for retail guarantees.

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