Banks warned on department closures as entry to money to be ‘protected in legislation’

The banking sector is being warned it faces penalties if it doesn’t safe free entry to money for the UK inhabitants, together with companies, following waves of department closures over greater than a decade.

Hours after Sky News revealed the Financial Conduct Authority (FCA) was to be given powers to fine banks that fail to offer free entry to money, the Treasury confirmed the rules the trade was anticipated to comply with.

The authorized framework confirmed that no individual or enterprise must be additional than three miles away from services to withdraw or deposit money together with a money machine, in any other case referred to as an ATM.

It additionally pledged that no clients ought to face further or hidden expenses for the providers and that if a facility is being withdrawn, a substitute must be put in place earlier than the closure takes place.

The transfer follows a backlash in opposition to the disappearance of bodily banking websites with charities, MPs and shopper teams lengthy arguing the weak, notably the aged, are being denied face-to-face banking providers of their communities.

The problem has dogged the sector because the monetary disaster of 2008 when department closures, as a part of cost-cutting measures, gathered tempo.

The trade has, in more moderen instances, blamed the surging use of digital banking providers by shoppers and companies for culls to department numbers.

It argues that many will not be getting used sufficient to make them financially viable.

Figures launched final month by the Unite union advised greater than 6,000 branches had been misplaced since 2015 alone, with different websites or submit workplaces taking on the slack.

Industry statistics confirmed there have been 51,272 money machines within the UK final yr, 78% of which had been free to make use of.

The authorities positioned entry to deposit and withdrawal services beneath the auspices of the FCA for the primary time final yr.

While the regulator might be given the facility to wonderful banks which fail to stick to the brand new tips on entry to money, it has beforehand discovered there’s little trigger for rapid alarm.

Its analysis, printed in May, confirmed 96.3% of the UK inhabitants at the moment lived inside 1.24 miles of a free-to-use money entry level, with 99.8% inside 3.1 miles.

The authorities stated in its assertion: “As it stands, the vast majority of people living in urban areas can access cash deposit and withdrawal services within one mile; with rural dwellers around three miles away.

“Today’s coverage assertion makes clear that the FCA ought to use its powers to take care of this stage of protection whereas recognising that wants might differ by location and alter over time.”

Economic Secretary to the Treasury, Andrew Griffith, added: “Whilst the rising selection and comfort of digital funds is nice, money has an necessary and persevering with position to play.

“That’s why we are taking action to protect access to cash in law and laying out that this means fee-free withdrawals and the availability of cash facilities within a reasonable distance.

“People shouldn’t have to trek for hours to withdraw a tenner to put in someone’s birthday card – nor should businesses have to travel large distances to deposit cash takings.

“These are measures which profit everybody who makes use of money however notably these dwelling in rural areas, the aged and people with disabilities.”

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John Howells, the chief executive of ATM operator LINK, said the plans would complement the body’s existing commitments to ensure every high street gets free access to cash.

“The UK isn’t able to grow to be a cashless society, so it is good to see these guidelines grow to be legislation,” he added.

Jenny Ross, editor of Which? Money, welcomed the measures but said they needed to go further.

“The authorities should put in place measures which guarantee those that wish to withdraw or deposit money are appropriately served of their native communities.

“The Financial Conduct Authority must make use of its new powers to ensure banks meet their obligations and stand ready to direct them to address any gaps.”