RBS and Lloyds refuse to bow to pressure on basic banking charges

Saturday, 03 December 2011 10:27

The Royal Bank of Scotland (RBS) and Lloyds have been criticized for a decision to restrict access to cash machines for customers who have basic bank accounts.

Both banks are part-owned by the taxpayer and their share prices are so low that the public contribution to bailing the banks out is not likely to be repaid for the foreseeable future.
Andrew Tyrie MP, the chairman of the Treasury Select Committee requested that both banks reconsider their decision which could prevent basic bank account holders from using the majority of the UK’s free cash machine network.

Andrew Tyrie said: "I understand the need to reduce costs, particularly at this difficult time.

"However, the decision to restrict access to cash machines has major implications for universal banking services and appears to target those vulnerable consumers who are most at risk of financial exclusion.”

An extract from the reply by the Royal Bank of Scotland (RBS) said: “We currently pay a charge on every transaction, every time someone checks their balance or makes a withdrawal at an ATM run by another company. As a consequence we are running basic bank accounts at a loss to the bank which we need to reduce.”

An extract from the reply from Lloyds said: “We remain committed to continuing to provide a basic bank account service under each brand (Lloyds TSB, Halifax and Bank of Scotland) for people who might otherwise struggle to access free banking services.”

Richard Lloyd, Which? executive director said: "It's a disgrace that the tax-payer owned RBS has gone further than any other bank and denied 1.1 million of its customers access to the majority of free cash machines.

"RBS should reverse its decision and, with the other banks, commit to offering universal cash machine access for basic bank account holders."

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