Banks may face fines if they fail to provide access to cash withdrawals within a certain distance of customers, HM Treasury said Thursday evening.
Under a new framework, “the vast majority” of people and businesses in the UK should be no more than three miles away from a facility to withdraw or deposit cash, the Treasury said in a statement.
The government is granting the Financial Conduct Authority (FCA) watchdog the power to fine banks if they do not keep up with the standards of providing access to cash, it added.
According to the statement, currently most people in Britain living in urban areas can access cash points within one mile, but in more rural areas the distance rises to around three miles.
The FCA should use its powers to maintain this level of coverage, “while recognising that needs may differ by location and change over time”, the Treasury said.
While the number of online payments has increased from 45 per cent to 85 per cent over the past decade, “cash can still be an integral part of many businesses and people’s lives”, the Treasury added.
“People shouldn’t have to trek for hours to withdraw a tenner to put in someone’s birthday card –- nor should businesses have to travel large distances to deposit cash takings,” Economic Secretary to the Treasury Andrew Griffith said.
The new measures will particularly benefit “those living in rural areas, the elderly and those with disabilities”, he added.
The shift to online banking has led to the mass closure of UK bank branches in recent years, including the big four of Barclays, HSBC, Lloyds and NatWest.
The closures have alarmed consumer groups, who argue the moves hit those who predominantly still use cash, particularly the elderly.
The trend towards cashless payments and online banking has accelerated since the coronavirus pandemic.