A woman with power of attorney for her sick mother has been hospitalised with stress after TSB Bank froze the elderly pensioner's life savings due to concerns about "unexplained transactions".

TSB has now reinstated access to one of the mother's accounts so she can draw her pension to pay for food and essential medicines.

But despite the daughter having legal authority to act for her mother, TSB refuses to let either woman access the dementia-sufferer's $150,000 nest egg.

The daughter, who is her mother's sole caregiver, claims TSB accused her of fraud and trying to steal the 82-year-old's money when she visited the Tauranga branch last month.

Armed with her Public Trust power of attorney document, the daughter tried to set up internet banking to better manage her mother's finances, but says staff trespassed her and threatened to call police.

She has lodged a complaint with the Banking Ombudsman and is now preparing to sue TSB for damages.

In her opinion: "The effect on my life has been devastating. I've got to support my mum and now I'm broke. This is absolutely killing me."

TSB denies accusing the daughter of fraud but says it is obligated to act in customers' best interests and prevent what could be "unauthorised access" to accounts.

"We put a lot of effort into ensuring customers who are vulnerable or could be at risk of fraud, are supported and protected."

The mother and daughter met TSB staff two weeks ago to try to broker a deal but the meeting was abandoned.

In a letter to the mother on June 14 explaining why her money remained frozen, a TSB manager wrote: "We have concerns about some of the transactions on your account."

He wanted to be confident the mother was "in control" of her finances before access to the savings could resume.

Addressing claims TSB had accused the daughter of theft, the manager wrote: "Those were not my words.

"We have concerns about the nature of the transactions on your account and these were out of character from ... previous transactional behaviour."

TSB still needed the power of attorney document plus proof of the daughter's identity before account access was reinstated.

In the meantime, TSB would pay bills and reimburse expenses if the women provided invoices and receipts.

The daughter shares her house with her mother and said the pair lived frugally on the daughter's modest income and her mother's pension.

The bank's actions had forced them to borrow from family to cover unexpected bills.

The daughter said the bank had raised concerns about a $20 service station transaction and $600 Warehouse invoice for "winter bedding".

"Why does my mum have to justify her spending? There's no pokies, there's no Pornhub. We go to the Warehouse, we go to the op shop. What else is there to spend our money on?"

The daughter said she had been hospitalised with stress-induced cardiovascular problems and pneumonia, which she believed was linked to the standoff with TSB.

Her mother was also distressed.

They wanted access reinstated so they could transfer the savings to another bank.

In a statement, TSB said that like all banks, it had strict processes to prevent unauthorised access to customers' accounts, "so we can ensure their money isn't accessed by anyone it shouldn't be".

"When we identify transactions not consistent with the usual behaviour of our customers, we take steps to ensure their money is protected."

TSB would only authorise other people to access a customer's account if power of attorney and identification documents had been verified.

The bank was still awaiting this information from the daughter but was working to resolve the matter.

The Banking Ombudsman told the Herald it was "working closely" with the parties but was "not currently investigating the complaint".