The Commons Treasury Committee has called on two state-backed banks, Royal Bank of Scotland (RBS) and Lloyds TSB, to remove restrictions on cash machine withdrawals for basic bank account holders. The MPs warned that the rules, which limit access to ATMs operated by other banks or third parties, could undermine the UK's cash machine network and disproportionately affect the poorest customers.
The committee praised Barclays, HSBC, and Santander for offering unrestricted access to third-party ATMs for basic account holders. Conservative MP Andrew Tyrie, chair of the committee, stated: "Restricting access to cash machines could compromise the network. In certain areas, more than a third of ATMs could be placed at risk if other providers were to take similar action." He noted that the financial benefits to Lloyds and RBS appeared small relative to the impact on vulnerable customers.
RBS and NatWest phased in the restrictions in November 2011, while Lloyds TSB applied similar rules to accounts opened after September 2011. A Lloyds TSB spokeswoman defended the policy, highlighting that customers can use over 6,500 Lloyds Banking Group cashpoints and 12,000 Post Offices, with most able to access their money within a mile. She added that the bank opened over 100,000 new basic accounts last year.
Basic bank accounts are designed for individuals with poor credit histories or no credit score, offering limited services such as direct payments and standing orders but often no overdraft or debit card. The Treasury Committee will write to other providers to confirm their stance on ATM access. A Which? spokesman urged consumers to switch to banks that do not impose unfair charges.
