The Bank of England governor insisted people must be able to have face-to-face banking services on a daily basis.
His staunch defence of High Street banks comes amid a torrent of branch closures across the UK.
Lenders have already announced at least 189 branches will shut in 2024 – and the latest exodus follows the 645 that closed last year.
Nearly 6,000 outlets have disappeared since the start of 2015 as banks continue to cut costs and point to the growing shift by customers towards using online services.
The Daily Express is crusading to Save Our High Street Banks amid warnings that traditional banking will vanish by 2027.
Mr Bailey was asked about the demise during an appearance before the Treasury select committee.
He told MPs: “I think it is important that people in this country have the ability to have direct access to their banks.
“By direct I don’t just mean online – in other words physical. Where they want it, they should be able to get it.”
He said the simple reason that so many banks are closing is because they are not being used as much as before.
“The banks will say the footfall in branches has fallen a lot, they will say this. They are just not used as much as before,” he added.
Mr Bailey also gave reassurances that the BoE has no intention of withdrawing cash from circulation despite usage generally falling steeply since the pandemic.
The use of cash went up by seven per cent in 2022 as families turned to notes and coins to help them budget during the cost-of-living crisis.
Physical money use fell dramatically during the pandemic, declining by 35pc in 2020 alone compared with 2019.
“We have seen a big fall in cash but we have, very recently, seen a bit of an uptick,” Mr Bailey told the committee.
“By the way, the stock of cash has not fallen. We have been very clear that we have no intention of withdrawing cash [from circulation]. If the public wants cash, the public gets cash. That’s absolutely clear.
Quizzed by Labour MP, Dame Siobhain McDonagh, about whether the public should have free access to cash, Mr Bailey said “costs have to be covered”.
But he reiterated that “a lot of thought should be given” to how to protect High Street banks in the future.
“I think the public has to have physical access to banking and those services,” he added.
Leading the charge of closures this year is Lloyds which is closing 60, ahead of Halifax with 47 then Barclays at 34, NatWest 21, Bank of Scotland 16, Ulster Bank 10 and RBS one.
Among the towns being hit by closures are Bicester in Oxfordshire, Penzance in Cornwall and Lymington in Hampshire. Others include Whitehaven in Cumbria, Porthcawl in South Wales, Witham in Essex and Downpatrick in Northern Ireland.
Banks have reduced branch networks for years in an attempt to drive down costs, but the rate has grown with the increased uptake of digital alternatives.
This was accelerated by the pandemic – although campaigners have warned that elderly and vulnerable users are being left behind.
One idea to try to alleviate the pain for those communities affected is the setting up of banking hubs.
These allow different lenders to share branch facilities, each taking it in turn to use them to serve customers on different days of the week.
However, critics claim that these are not keeping pace with the scale of closures.
Only 31 have been opened in towns previously left bankless by the withdrawal of all the big banks and building societies. A further 70 are already scheduled to open next year.
Barclays closed the largest number of branches in 2023 at 180, and already has 34 planned for this year.
It was followed by NatWest on 138, with 21 pencilled in for 2024.
Royal Bank of Scotland, also part of the NatWest Group, shut four branches last year and has one closure earmarked for this year.
Ulster Bank, another NatWest-owned company, closed zero branches last year but plans ten in 2024.
NatWest, which remains 38 per cent owned by the taxpayer, has indicated that more closures are likely.
HSBC had the third highest number of closures in 2023, at 114, although none are planned for this year.
Last year, the bank’s UK boss Ian Stuart sparked a backlash when he told MPs that the closure of bank branches was “following what the customers want”.
Lloyds closed 85 branches in 2023 and plans 60 closures in 2024.
Halifax – which is also part of Lloyds Banking Group – shut 52 last year and has pencilled in a further 47 for this year.
