Alternatives needed for businesses hit by rural bank closures
The Federation of Small Businesses offered advice for those affected by closures.
Alex Black
Alex is business reporter at Farmers Guardian covering areas including commodity prices, imports and exports, property and land across all Load More...
Alex Black
Alex is business reporter at Farmers Guardian covering areas including commodity prices, imports and exports, property and land across all Load More...
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Rural economies relying on local bank branches need to be offered suitable alternatives before those branches are closed, with small firms still valuing in-person support for complex transactions and big decisions.
That was the message from Federation of Small Businesses (FSB) national chairman Mark Cherry following the announcement of the closure of 259 Royal Bank of Scotland (RBS) and NatWest branches.
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RBS attributed the closures to a 40 per cent fall in usage since 2014, as well as a 41 per cent increase in mobile and online banking.
Advice
Mike Cherry, FSB National Chairman, said: “Small businesses should receive at least 12 weeks’ notice alongside advice about banking alternatives before any branch closure.
“The Access to Banking Standard details the obligations banks have to their customers when they close branches and it’s vital that those obligations are met.
“We would encourage those caught unexpectedly by a branch closure to explore the online services offered by different banks to see if they present a workable alternative to in-person support. Equally, firms can consider the banking services offered at their local post offices.
“Of course these services vary in quality and poor broadband and digital skills remain a barrier to internet banking for some, particularly those in rural areas. What we need to see is lenders meeting the Access to Banking Standard without fail so all businesses have alternatives prepared long before a bank branch closure happens.”
How to pay in cash or cheques if your bank has closed
- You can pay in cash or cheques at the Post Office up to a limit of £20,000 cash per day. However, the maximum amount at some branches is £2,000.
- If you are a credit union member you can deposit cash at any credit union branch
- Some ATM machines allow you to deposit cash out of normal banking hours
- Never send cash in the post
- Cash in hand payments must be declared through HMRC
Many banks, including RBS, do offer help getting people onto online banking for those unsure how to use it.
Alternatives
RBS said businesses should speak to their contact to provide details of alternatives, including courier services for those not wishing to visit another branch.
Other options include mobile branches which are available in some locations and local post offices where customers can view their balance, make withdrawals and pay in cash and cheques, as well as make withdrawals and register for change giving services.
Despite previous restructuring, the Post Office said 99.7 per cent of people live within three miles of their local post office.
Mr Cherry added access to cash was a big issue and while more small firms were accepting credit and debit cards, it added costs, and many customers in rural and tourist areas only dealt in cash.
Depopulation
The Farmers Union of Wales (FUW) warned more rural services closing were contributing to rural depopulation which could have a ‘severe effect’ on the local economies, with 20 closures planned for Wales.
FUW President Glyn Roberts said: “These banks are 70 per cent owned by the UK taxpayer, so we have to ask why are there no conditions to the bailout that guarantees access to such services. It is clear that Governments must do more for rural Wales.
He added: “If the problem of rural depopulation is not addressed with some urgency it could have severe consequences for our rural communities and with that also our rural economy.
“It is clear that if we want to ensure that Wales develops its full potential in being a rural economic powerhouse, we must make it attractive for working families to stay and also encourage vital services like business banking to remain available."
Banking at the Post Office
- Through the Banking Framework Agreement launched in January 2017, 95 per cent of all small business banking customers can access everyday banking services through all 11,600 branches
- Services include cash withdrawals, cash and cheque deposits, balance enquiries and change giving to customers of virtually all banks.
- Half of Britons say that a Post Office branch is one of the most important services in their local community (more important than the bank branch, library or pub), according to a 2017 Citizens Advice report
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Farmers Guardian and FarmersGuardian.com are trademarks of Farmers Guardian Ltd, a subsidiary of AgriBriefing Ltd.
All material published on FGInsight.com and FarmersGuardian.com is copyrighted © 2019 by AgriBriefing Limited. All rights reserved.
