The Financial Conduct Authority has put forward regulations requiring banks to plug gaps in “cash deserts” – large areas with no branches or ATMs.
The new powers will not prevent bank branches from closing but will have an impact where branches are a key local source of cash, according to the regulator.
John Howells, chief executive of ATM network Link, said: “The FCA say that any location that is set to lose its final branch must have cash facilities in place before that branch shuts.
“This is a good job by the FCA with real teeth.”
Jenny Ross, Which? Money editor, said: “Thousands of bank branches and free cash machines around the UK have closed in recent years, often with little thought given to the impact on local communities.
“This has left millions who rely on cash at risk of being cut adrift.
“It’s good to see the FCA setting out how it proposes to carry out its
new responsibilities.”
The move comes as the use of cash has increased for the first time in a decade as households look to balance their budgets. Coins and banknotes accounted for nearly a fifth of transactions in 2022, according to the British Retail Consortium’s annual payments survey.
Natalie Ceeney, the chairman of Cash Access UK, said: “Crucially, not everyone is ready or able to use digital services.
“Face-to-face and ATM cash services are still vitally important for millions of individuals and small businesses across the UK and will be for many years to come.”
The rules will require banks and building societies designated by the Government to take into account local factors in any area where they plan to close a branch. These include the number of pensioners living in the region and the nearest cashpoint.
The consultation will remain open until February 8 and the FCA expects to finalise the rules by July.
