The three community banks in Baw Baw Shire have been excluded by the State Education Department from holding accounts of local state schools.
A directive from the department, Financial Manual - Financial Management for Schools, has given Victorian government schools that don't already bank with one of its approved banking suppliers - major banks Westpac, Commonwealth Australia Bank (CBA) or National Australia Bank (NAB) - to "transition" by the end of this month.
Drouin and District, Neerim District and Trafalgar and District community Bendigo banks are disappointed with the action by the Education Department. Local schools, including state schools, have been significant beneficiaries from their community grants programs.
Schools' operating accounts that must be held in the name of the school council are used for receipt of monies from local and commonwealth government sources and local funds such as voluntary contributions, donations and fund-raising activities.
The community banks are the only remaining banks in Drouin, Neerim South and Trafalgar following the closure of branches there by the major banks.
The only branches of the major banks now available in Baw Baw Shire are in Warragul.
The Drouin, Neerim and Trafalgar community banks were not willing to state what schools bank with them or did so until recently.
Drouin and district community bank chair Rod Dunlop said the government's decision did not recognise what the local banks do for their communities.
He said every school in the district had benefitted and received a high percentage of the $6 million the Drouin bank had reinvested in the district since its inception 20 years ago.
Minor school improvements, sporting equipment and scholarships as well as the Baw Baw Live4Life program running in secondary schools had all received grants from the bank, Mr Dunlop added.
"A significant percentage of the $6 million that has been distributed over the years has been to schools," he said.