A new law would allow the Financial Conduct Authority to order banks to offer services like ATMs and mobile hubs – but they could still close branches
The Financial Conduct Authority (FCA) will have the power to order the largest banks and building societies to continue offering services such as ATMs and mobile hubs so residents can withdraw money regularly.
Banks will be prevented from withdrawing their services from towns and villages that would not have access to cash as new powers are given to Britain’s Financial Conduct Authority.
Under the new powers to be included in the forthcoming Financial Services and Markets Act, banks could continue to close branches even if they are the last in a given municipality.
However, they would have to replace them with alternative services in certain circumstances and ensure they are easily accessible, leaving almost all Britons within two miles of a free cash dispenser.
More than 4,700 bank branches have been closed since 2015, with 227 more set to close by the end of this year as banks seek to shift to more and more digital services.
John Glen, Business Secretary at the Treasury, said: “Millions of people in the UK still depend on cash, particularly those in vulnerable groups, and today we are delivering on our pledge to ensure access to cash is protected in communities across the country is .
“I want to ensure people can continue to use cash as part of their daily lives and it is crucial to ensure that no person or community across the UK is left behind as we move towards a more digital world.”
The move was welcomed by the Scottish Government given the large number of relatively remote communities in Scotland that are at risk of losing easy access to cash.
A spokesman said: “The Scottish Government welcomes this much-needed legislation to protect consumers’ access to cash.
“This is particularly important for rural communities and a lifeline for consumers, especially the most vulnerable and small businesses.”
Martin Kearsley, Banking Product Director at the Post, said: “A strong regulator that ensures the rights of millions of people who rely on cash can access it conveniently and securely for years to come is something we and we need to do.” many others have asked for.
“We welcome the government’s announcement and want to see legislation that protects the entire cash cycle, including cash withdrawals to the dime, as many more people choose to control their household budgets by only spending what they physically have in their hands .”
The exact extent of the FCA’s powers – such as which banks and building societies are involved and the maximum distance between ATMs – will be announced when the draft law is published.
Later this year ministers are also expected to come up with proposals to ensure people can not only withdraw cash but also deposit it without having to travel an unreasonable distance.