CONSUMERS should have a legal right to have a bank branch in the town if there is no voluntary commitment, a group of MPs have said.
The government should seek a pledge from banks to retain at least one branch in every town, or introduce legislation to make it a statutory requirement if that is not forthcoming, recommends a report on access to cash from the Scottish Affairs Committee.
And in the wake of a spate of cash machine closures Scotland, the report calls on ministers to consider all measures, including legislation, to ensure communities still have access to vital banking services.
READ MORE: LINK issues free access to high street cash guarantee - with one Highlands village first
The report will be launched today in Cambuslang, a town of 25,000, which went from having three bank branches to having none in 2017 in the space of 11 months. At the same time the number of cash machines dropped from four to two.
A community council survey of local residents carried out earlier this year over the impact of the closures found that over three in four found it had a "major negative impact".
And over three in four found getting access to the cash they need regularly either very difficult or somewhat difficult. Just over one in five felt it was "not difficult". Scotland has also lost one in three bank branches in just eight years, with over 400 closing since 2015, making it one of the worst affected areas in the UK, and more often than not, the cashpoints will also disappear with them.
In Scotland cash machines were disappearing at a rate of 32 a month in the 11 months to April. At that point there were 6008 cashpoints in Scotland, with 359 ATMs gone over 11 months.
The Scottish Affairs Committee is concerned that many communities have now been left without a single bank in their town and that the nation has "suffered proportionally more" bank closures than the rest of the UK.
And the MPs report stresses that if banks refuse to make a commitment to stop closing the last bank branch in the town, the Government should consider introducing legislation to "prevent further bank closures and ensure communities still have access to essential banking services".
Commenting on the report, the committee chairman Pete Wishart MP said: “It is disgraceful that banks think they can abandon Scottish towns with no access to essential financial services.
"Last year my committee demanded that RBS halt their march of bank branch closures, but since then the picture seems to have just deteriorated further – in 2018 in Scotland 355 ATMs were shut down, and bank branches continue to close at an alarming rate.
"Scottish communities are becoming 'cash free' against their will and it is time the Government stepped in to intervene. My committee is calling on the Government to stop banks from closing the last remaining bank branch in town.
"It is essential that towns are left with at least one bank, so if the banks won’t make this commitment themselves, the Government should consider legislating.”
The committee further suggest that to prevent further ATM closures, network provider LINK should not introduce its fourth planned interchange fee reduction.
The Herald revealed in June that the ATM Industry Association, in warning as many as 1000 cashpoints in Scotland will turn to charging in the next year said the problem revolves around a 10% or 2p cut in the fee that the bank pays cash machine operators every time money is withdrawn.
They have warned that the move to charging cash machines will increase if LINK, which oversees the UK's largest cash machine network, moves to cut the fee even further.
The report also calls on the ATM industry regulator to ensure that financial inclusion programmes aim not only to slow the rate of ATM closures across Scotland but also to incentivise operators to open new cashpoints in rural and vulnerable communities The committee also called for a shared banking hub pilot to be extended to rural Scotland.
The report says that in towns with no bank branch remaining it is reported that people are now forced to travel outside their community to access cash and having to pay, directly or indirectly, to access their money.
Businesses also suffer from their customers’ lack of access to cash, as costly digital payment systems are often rendered unreliable by a weak phone signal or broadband connection, the committee say
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