Will banks’ new limits force us to go cashless?

Rule change: Critics say NatWest’s move will push us all ever nearer to a cashless society

The country’s major high street banks are expected to follow NatWest’s notorious lead and give themselves the right to restrict the amount of cash that customers can withdraw from – or deposit into – their current accounts.

Critics say NatWest’s move, apparently designed to clamp down on fraud and financial crime, will push us all ever nearer to a cashless society.

Last week, The Mail on Sunday asked every major high street bank whether it would adapt its rules on cash withdrawals and deposits to fall in line with NatWest’s.

The banks which responded said they had no imminent plans to do so, but none, tellingly, ruled it out.

Eight million people rely on cash for day-to-day needs. Many are financially vulnerable, elderly and would struggle without access to cash.

Accessibility has also been compromised by the closure – or impending closure – of more than 1,000 bank branches since the start of last year.

NatWest, part owned by taxpayers, allows customers to withdraw up to £750 from one of its cash machines – or £20,000 in person at one of its branch counters. But from the middle of next month, it has told customers that it will have the right to apply daily – or annual – limits on cash deposits and withdrawals.

These limits, it said, are justified because ‘protecting our customers from the risk of fraud and financial crime is important to us’. Deposits will be capped at £3,000 a day when customers use one of its in-branch deposit cash machines.

Banks already apply some restrictions to individual cash withdrawals. For example, Barclays caps them at £2,000 unless more than 24 hours notice is given. HSBC is more generous at £10,000.

When it comes to cash machines, Santander already limits the amount that can be deposited to £2,000 a day – but no more than £10,000 on a rolling annual basis.

Barclays, HSBC and Lloyds, are more flexible. While restricting the number of notes deposited at any one time to between 50 and 200, they do not restrict the number of deposits.

When withdrawing cash from an ATM, the least reasonable are Barclays and Santander, typically £300 a day.

Derek French, founder of Campaign for Community Banking Services, fears NatWest’s move is another nail in the coffin of the high street branch – and access to cash. He says: ‘As a personal or business customer, you should be able to deposit and withdraw cash at your own bank without restriction. But I fear that other banks will follow NatWest.’

French says NatWest is leading the way on restricting cash transactions because it was fined two years ago for failing to comply with money laundering laws. Post offices limit daily withdrawals for bank customers using its services to £300. The equivalent limit for deposits is £3,000 for personal bank customers – with an annual cap of £10,000.

For business bank customers, typically up to £10,000 can be deposited in a single transaction – though banks have different allowances and individual post offices can lower the amounts in response to security concerns.

On withdrawals, they might typically be able to take out £500 in cash.

French fears that banks could move in line with these post office limits.

NatWest started sending out pamphlets to customers (pictured) about the changes to daily and annual cash deposit and withdrawal limits in June.

On Friday, NatWest said: ‘We review our policies regularly and always seek to balance our regulatory responsibilities with the needs of customers.’

Santander said: ‘We have no plans to change our deposit and withdrawal limits at our branch counters and ATMs. But we regularly review limits to ensure they comply with our regulatory and legal obligations.’

HSBC said: ‘We keep all policies under review’. Lloyds and Barclays failed to comment.

This post first appeared on Dailymail.co.uk