The Royal Bank of Scotland (RBS) is planning to stop close to ten per cent of its account holders from using cash machines that are owned by rival banks.
The decision means that customers with basic bank accounts that don’t offer overdrafts or chequebooks will only be able to withdraw money from RBS, Natwest, Tesco or Morrisons cash machines or they can withdraw cash over the counter at the Post Office.
The bank, which is 83 per cent owned by the taxpayer, said that it had made the decision because it is charged for each of these transactions and was not able to recover the costs of RBS customers using other banks’ cash machines.
A spokesman from RBS said: “It is unsustainable for us to offer free access to other bank ATMs for basic accounts as we face a charge per bank transaction, which needs to be recovered elsewhere."
The move has raised concerns that free banking in the UK could be coming to an end. It also seems to penalise the neediest customers and will severely cut back the options for taking out cash for free for many of the poorest bank account holders.
Marie Burton, financial inclusion expert at Consumer Focus said: “This is a kick in the teeth for many of RBS's most vulnerable customers. We would call on RBS to re-consider this move which will exclude its basic bank account holders from using the majority of the UK's free cash machine network.”
The move will affect customers who have a step or cash account. Lloyds already puts limits on how many of its basic bank account holders can access cash from other banks’ ATM’s.
RBS says that these account holders will still be able to access free cash from 20,000 different outlets.
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