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Commonwealth Bank says it will "change its approach" after receiving backlash over a move to implement a $3 withdrawal fee.
Yesterday, CBA announced customers would be charged a fee for withdrawing cash over the counter at a branch, post office or over the phone from January 6.
The move has come under strong criticism with the federal government urging the bank to reconsider.
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In a statement today, CBA's retail banking services Group executive Angus Sullivan said the bank would review its approach to the changes.
Sullivan conceded the bank had "done a poor job" of communicating the change to customers.
"We are particularly conscious of the impact any change to planned fees and charges can have at this time of year, especially given the cost of living pressures our customers face," Sullivan said.
"For our complete access customers – which is roughly 10 per cent of our 10 million odd customers – there are approximately 90 per cent of our complete access customers for whom the change that we announced yesterday would put them in a better or equal position to today.
"The changes taking place are such that the approximately 90 percent of customers we intend to move, and who we expect will be better off or the same, will be moved to the lower monthly fee account.
"If those customers don't want to move, they can contact us to discuss their options. For the remaining customers we are changing our approach and we are pausing the migration."
Sullivan said the bank would contact customers over the next six months to discuss the most appropriate product for their needs.
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In the meantime, the bank would continue migrating them to a bank account with a lower monthly account fee.
"If that doesn't work for customers, of course, they can be in contact with us and we can arrange an alternative solution for them," Sullivan said.
At a press conference, Treasurer Jim Chalmers said he met the bank's chief executive Matt Comyn this morning to flag that the changes were "unacceptable".
"The changes were not acceptable or appropriate, we made our views very clear," he told reporters.
Chalmers said he and Comyn engaged in "constructive" discussion to ensure vulnerable customers weren't worse off.
"They will have another look at those changes to make sure that people are not worse off," he said.
"We are talking and lots of instances about some of the most vulnerable people in the banking system.
"I welcome the change of heart."
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