Bank bosses will rejoice – but they risk an uprising by their customers

SOMETIMES, it is difficult to work out what consumer purpose the Financial Conduct Authority – the country’s City regulator – serves.

It’s a conundrum I am sure many consumers will be asking themselves today – after Nikhil Rathi, the regulator’s head honcho, gave the big banks the green light to axe free-in-credit banking in favour of fee-charging current accounts.

A ‘go’ light that when (not if) acted upon by the banks will make the blood of millions of hardworking people boil over with bubbles of financial rage.

As for the banks, I am sure their bosses are already rejoicing. Yet more profits to keep the City happy – and yet more directors’ bonuses that would keep us mere mortals financially secure for many a lifetime.

Surely, the regulator should understand that free banking for those who keep their accounts in good order is woven into this country’s financial fabric – like good old fish and chips or bangers and mash. It’s a reward for thrift and should not be abandoned.

Most people, especially the elderly, will simply not entertain the idea. A financial uprising? Don’t rule it out.

For example, we had one 25 years ago when some of the big banks wanted to charge non-customers for using their cash machines. Consumers won that battle, and I am sure they would put up an almighty fight over the loss of freein-credit banking.

We shouldn’t be surprised that Mr Rathi said the FCA would not stand in the way of those banks which wanted to discard free-in- credit banking. It’s a ‘ market and commercial decision, not a regulatory requirement,’ he added.

After all, this is the timid regulator that stood on the sidelines for ages while the banks ripped off their savers with miserly returns as the Bank of England aggressively pushed up interest rates in 2022 and 2023.

It was only the wrath of the Treasury committee, chaired by the formidable Conservative MP Harriett Baldwin, that prompted the banks to start rewarding savers with slightly higher interest rates.

And while the FCA has only just taken over responsibility for ensuring nationwide access to cash, it has hardly covered itself in glory so far. The banks keep slashing their branch networks with impunity – Lloyds confirming 53 impending branch closures across its three retail brands this week.

Next Wednesday, the Treasury committee will grill the bosses of Barclays, Lloyds, NatWest and Santander over whether they are giving customers a fair deal – against the backdrop of a persistent cost-of-living crisis.

I trust Ms Baldwin will use the opportunity to grill them over whether they intend to abandon free banking for those who stay in credit. Maybe she should also ask Mr Rathi to come along.