NatWest imposes new cash deposit limits in latest de-banking row

NatWest, a well-known UK high-street bank, is causing a stir with its recent decision to grant itself expanded powers that could impact how customers handle cash. The bank has informed its current account holders that it’s introducing new conditions, giving them the authority to set limits on both incoming and outgoing payments. This could potentially mean imposing restrictions on daily and yearly cash withdrawals and deposits, as well as controlling the overall amount of cash that can be transacted.

This move has triggered concerns that banks are steering customers towards a future without physical currency, prompting fears of a “cashless society.” There’s a growing worry that tightening restrictions on the use of paper money might not bode well for consumers.

Interestingly, this development comes in the midst of a broader issue known as “de-banking,” which recently gained attention when Nigel Farage revealed that Coutts, owned by NatWest Group, shut down his account due to political disagreements.

While NatWest claims that these changes are aimed at safeguarding customers from the risks of fraud, skeptics question whether this might also restrict customers’ cash access. It’s worth noting that financial institutions have been directed by the City watchdog to enhance their efforts against financial crimes.

Nigel Farage expressed deep concerns about banks assuming such wide-ranging powers over their customers’ cash usage. He emphasized the importance of maintaining access to legal tender and ensuring that corporate decisions don’t impede customers’ financial freedom.

NatWest has communicated these alterations in a leaflet titled “tomorrow begins today,” distributed to customers in June. The new rules, set to take effect on September 11, enable the bank to apply limits on payments to and from customer accounts, particularly for cash transactions, to counter the risk of fraud, scams, or other illicit activities.

As this situation evolves, discussions surrounding a cashless society gain momentum, with Anne-Marie Morris, a Tory MP, raising the alarm about the potential implications. While efforts to combat money laundering are crucial, Morris insists that a balance must be maintained, and society should not be deprived of the option to use cash.

Cash limitations are not new, as most banks have imposed daily caps on ATM withdrawals and transfers to ensure protection against fraud. NatWest, for instance, permits current account holders to withdraw up to £750 from an ATM or £20,000 from a branch without prior notification.

Despite this, NatWest asserts its commitment to cash accessibility, citing initiatives such as delivering cash directly to vulnerable customers. Nevertheless, concerns remain about the impact of deposit and withdrawal limitations on customers.

In light of recent poll results from Red Wall constituencies, where eight out of ten voters believe that individuals should have a legal right to pay with cash, and one in five find it challenging to use physical money instead of cards, the discussion around cash usage intensifies.

While the government has passed legislation to ensure “reasonable access” to withdrawal and deposit facilities, it has refrained from mandating businesses to accept cash payments. This complex landscape highlights the delicate balance between combating financial crimes, ensuring customer freedom, and embracing emerging forms of digital transactions.

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