Fears of ‘domino effect’ after RBS ATM ban


by a Newsnet reporter

The Nationwide Building Society has confirmed fears of a ‘domino effect’ after last month’s announcement by the Royal Bank of Scotland that it would ban some less wealthy account holders from withdrawing their money from other banks’ ATMs.  Central Scotland SNP MSP John Wilson raised concerns about the state owned bank’s move at the time, pointing out that it would be punitive on those who are already suffering the financial brunt of the bankers’  profligacy.  Lloyds bank has now joined the list of banks imposing the same restriction on customers.

Mr Wilson has taken the issue up with RBS, and First Minister Alex Salmond has urged RBS to reconsider.  A recent opinion poll published by Yougov shows that a large majority of the public are opposed to the move.  Those living in rural areas and dependent upon public transport will be hardest hit, as there are often few ATM machines within a reasonable distance.  

In a letter to the MSP,  Mark Renison, the Finance Director of Nationwide says that now other banks will have to impose the same restrictions on basic account holders, claiming the RBS’s move has created an “unsustainable” position for ATM operators.  

Mr Renison states: “Unless RBS/Nat West and Lloyds Group reverse their decision to restrict access for their customers this could lead to a situation where all other banks and building societies are forced to take similar measures.”

If a Nationwide customer uses an RBS ATM to withdraw cash or check their balance we will pay RBS a fee of between 20p and 30p for this service, to help cover costs such as installation, maintenance and servicing of that ATM, and vice versa if an RBS customer uses a Nationwide ATM we will receive the fee. RBS, as the largest operator of ATMs in the UK, is already a net beneficiary of the LINK interchange fee.

“Therefore the combined impact of the decision by RBS/NatWest and Lloyds Group, will make it less viable for other banks and building societies to continue to offer a full ATM service for their customers.”

Reacting to the warning Mr Wilson condemned the banks saying:

“The policy of restricting basic customers from other banks use of ATMs will cause serious issues for basic bank account customers of all banks.

“The blow will be particularly felt by those on low incomes and people in rural communities.

“A large number of people across Scotland will find accessing cash they need a serious problem as in some cases they will have to travel several miles to a cash machine.

“This will affect the most vulnerable in our society and indeed undermines the banks own customers.  At a time when banks like RBS should be trying to rebuild public confidence and their relationships with customers this action is alienating those who rely on their services.

“It is a thoughtless decision by the banks and if RBS and Lloyds will not reconsider their decisions then I will be looking to the UK Government to step in.”

Mr Wilson added that families on low incomes would be especially badly hit by the banks’ charges for using the machines, “Those on the lowest incomes usually draw out small amounts from ATMs to cover ongoing expenditure and will therefore suffer the greatest from the withdrawal charges imposed.”