MPS take aim at RBS over latest round of closures
Loss of branches leaves vulnerable facing ‘financial exclusion’ and puts people at risk of fraud, they warn
ROYAL Bank of Scotland is facing a political backlash over plans to slash its branch network by nearly half in less than a year.
Nicky Morgan, the chairman of the powerful Treasury select committee, told The Sunday Telegraph she was concerned the latest cuts could lead to “financial exclusion” for vulnerable customers, such as the elderly or disabled.
“They must not be left behind,” she said. Ms Morgan said she would raise her concerns with the Treasury to ensure ministers are “monitoring” the situation.
Her intervention comes after the taxpayer-controlled lender – bailed out for £45bn at the height of the financial crisis – announced a further 54 branch closures last week.
It was the latest of three rapid rounds of cuts since last December, taking the total to 475. RBS had 1,003 branches.
Ms Morgan is expected to raise her concerns with the Treasury by letter or in an evidence session.
“Despite the growth of online banking, there will remain a group of customers who want to use branch services. Such customers, who are often particularly vulnerable, will appear commercially less attractive to serve. But they must not be left behind,” Ms Morgan said.
The former education secretary also warned that the rush to replace physical branches with online and mobile services made the importance of IT resilience “greater than ever”.
Ms Morgan has been a vocal critic of IT failures at finance firms in recent months, including system outages at beleaguered bank TSB – where chief executive Paul Pester stepped down last week – and payment services provider Visa.
Kevin Hollinrake, the chairman of the all-party parliamentary group on fair business banking, warned that customers were exposed to a greater risk of fraud online. “The move towards online banking has seen a rise in instances of fraud,” he said. “This is hurting families and businesses and must be better understood, tackled, and more readily compensated before we lose brick-and-mortar banks.”
Consumer and small-business groups reacted angrily to RBS’S latest cuts last week. The Federation of Small Businesses argued it made “a bad situation worse”.
Gareth Shaw, money expert at consumer group Which?, said the closures were “another blow to RBS customers”, adding that across the industry as a whole 60 branches are closing a month.
RBS said the 54 closures involved branches in England and Wales that had been earmarked for inclusion in the aborted challenger bank Williams & Glyn. The lender announced plans to close 162 such branches in May.
The bank insisted last week the cuts were a “difficult decision” and committed to making no further closures until at least 2020. Ross Mcewan, the RBS chief executive, had previously made this commitment for Scottish branches.
The statement added: “Customers of Royal Bank of Scotland in England and Wales will be able to use Natwest branches and local post offices for their everyday banking needs. We will now focus on investing in our network in England and Wales to make sure customers have a consistent range of products and services.”
Nicky Morgan, the Treasury select committee chairman, said ministers are ‘monitoring’ the situation