Westpac would pay more than $100 million under a potential new bank levy proposed by Treasury to keep branches open in the bush, under a redistribution system enabling banks to trade regional banking service credits similar to a carbon trading scheme.

Industry participants warned that a bank levy to promote services in the bush would penalise emerging digital-focused disrupters such as Macquarie Bank by imposing higher costs and making it harder to compete aggressively against the four largest lenders on home loans.