Study warns of rural bank closures impact

More than 80 per cent of businesses, community groups and residents believe bank closures in the Highlands and islands will have a negative impact on the local economy, a report has found.

Development agency Highlands and Islands Enterprise (HIE) commissioned the survey in response to increasing bank closures after 28 branches were shut in the region since 2015, with a further 14 Royal Bank of Scotland branches planned to close this year.

Seven of the planned closures are in areas HIE has designated as fragile and could result in journeys of more than 50 miles to the nearest alternative, in some cases including ferry crossings.

About one in nine businesses surveyed said closure of their nearest or local bank would have a negative impact on community sustainability and the local economy, with more than 50 per cent believing this would be “strongly negative”.

For community groups this was slightly reduced, with one in eight citing a negative impact and more than half strongly negative.

Personal banking customers were also among the 992 respondents to the survey and more than 90 per cent foresaw a negative impact on the local economy, with more than 65 per cent believing it would be strongly negative.

The report found that despite moves to online banking for personal customers, cash remains “critical” for small businesses and community groups.