UK banks that fail to guarantee access to cash will be fined

UK banks must offer their customers the ability to deposit or withdraw cash free of charge within a maximum radius of one mile (1.6 km) in urban areas and up to three miles (4.8 km) in rural areas, according to the plan presented by the British Treasury, which contemplates the imposition of fines to those banks that fail to comply with their obligations.

The British Government has assured that its objective is to maintain reasonable access to deposit and withdrawal services and has defended that it does not consider it necessary to undertake a substantial redistribution or the large-scale introduction of additional access points, since the data at a national level suggest that the distribution of access to cash in the country is broadly comprehensive.

However, the UK Treasury has stressed that it is important to ensure that the “reasonable provision” takes into account potential local deficiencies that could have a significant impact, as well as evolving trends and innovations.

“While the increasing choice and convenience of digital payments is great, cash has an important and continuing role to play,” said Treasury Economic Secretary Andrew Griffith, stressing that the move will particularly benefit those who living in rural areas, the elderly and people with disabilities.

“That’s why we’re taking steps to protect access to cash by law and making this mean withdrawals free of charge and cash availability within a reasonable distance,” he added.

Thus, Treasury seeks with this statement to ensure that the Financial Conduct Authority (FCA) will use its powers to maintain the current level of coverage, while acknowledging that needs may differ by location and change over time, while which makes it clear that if a service is retired and a replacement service is needed, it must be implemented before the shutdown occurs.

It also requires the FCA to “take into account” local deficiencies in access to cash and states that the regulator must consider factors such as opening hours and distance to cash access services, as well as the need for assistance in person.

Thus, building on the laws granted through the Financial Services and Markets Act 2023, the FCA will use these new powers to ensure that banks and building societies comply with these standards, and will have the power to fine them if they don’t.

Source: dpa

(Source of main reference image: Alicja Ziajowska, Unsplash)

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