Banks fight for right to axe ‘redundant’ branches

SENIOR bankers are preparing to push back on proposals that would allow the City watchdog to block branch closures, arguing that strict rules could force them to keep bankrolling “tired and redundant” branches.

Bankers fear that a Treasury consultation exploring ways to ensure vulnerable customers still have access to cash could result in “rigid legislation” that would stop them from closing empty high street sites.

One bank executive said: “We don’t want to end up with rigid legislation saying we must have bank branches. That would be a concern. There’s a tired and redundant public phone box down my road. The world moves on. [There are] Better alternatives that can be delivered.”

The battle to preserve remaining branches has been high on MPS’ agendas amid concerns that vulnerable customers who do not use online banking are being cut off from their money. About 5m people are thought to rely entirely on cash.

However, the pandemic has accelerated the shift to online. UK towns lost 529 bank branches between the first lockdown in March 2020 and May this year, despite regulators urging lenders to hold back on cuts.

One area being explored in the consultation, which runs until Sept 23, is whether to give the Financial Conduct Authority power to block further closures. This is set to be unpopular with bankers, who would prefer alternatives such as shared bank hubs.

A Treasury spokesman said: “We know that cash remains vital for millions of people and we are committed to protecting access to cash across the UK.”