ANZ has become the latest bank to announce potential branch closures in small towns, with consultation under way for five locations.

Photo: RNZ / Claire Eastham-Farrelly

An ANZ spokesman said the bank was consulting with staff on closing branches in Milton, Ngāruawāhia, Otorohanga, Te Aroha and at Massey University in Palmerston North.

The vast majority of customers did their day-to-day banking online or on their phone, he said.

After "careful consideration", ANZ was proposing to close low-volume branches, leaving a smart ATM so customers could withdraw and deposit cash.

First Union national organiser Tali Williams said banking was an essential service for communities.

Last month, Westpac announced it was considering closing 19 branches across the country.

The announcement was met with dismay by residents in Fairlie, who would lose their only bank if the closure went ahead.