Customers are offered these free accounts, which have no overdraft or cheque book and may have historically struggled with debt. These customers will eb restricted to ATMs run by RBS, NatWest and Tesco or over the counter at Post Office branches, reported the Telegraph.
The watchdog, Consumer Focus condemned the decision, which it said was “a kick in the teeth” for many of the lender’s most vulnerable customers.
“We would call on RBS to re-consider this move which will exclude its basic bank account holders from using the majority of the UK’s free cash machine network,” said Marie Burton, financial inclusion expert at Consumer Focus.
“Although there are still nearly a million people without bank accounts, the banking sector has been working hard to steadily reduce this figure. Short-sighted moves like this will only help to reverse the good work that has been done. People living in rural areas deserted by bank branch closures may not have the option of other ATMs nearby.”
Like other banks, RBS is charged each time one of its customers uses a rival’s ATM. The bank currently has 8,000 free cash machines in the UK.
A spokesman for RBS said: “It is unsustainable for us to offer free access to other banks’ cash machines for basic accounts as we face a charge per bank transaction, which needs to be recovered elsewhere.
“We are fully committed to offering a free basic account for people who may otherwise struggle to access banking services.”
Existing basic account customers will begin to lose access to other banks’ cash machines “over the next few months”, the spokesman added. The bank will be writing to the customers affected.
Lloyds TSB, which is 41% owned by the taxpayer, has a similar ban in place for its basic account customers restricting them to its 4,200 cash machines in the UK, excluding Halifax and Bank of Scotland machines, which Lloyds bought in 2008.
A spokesman for Lloyds TSB, added: “We have had our ban in place for many years. Unlike RBS, we made our basic account customers aware of the restrictions of using high street ATMs before they opened an account with us. Customers are still able to to access funds via Lloyds TSB and the Post Office.”
