Labour Party said on Monday (17) it would give regulators new powers to significantly increase the number of 'banking hubs' on high streets if voted to power.
MPs have flagged concerns about the closure of branches leaving some people, particularly in rural areas, facing difficulties accessing cash as many customers bank online and use cards to pay in shops, cafes and petrol stations.
Banking hubs are located in communities across Britain and operated by the country's Post Office, in partnership with nine high street banks. They allow for face-to-face personal and business banking as well as transactions and cash withdrawals.
Labour, which polls tip to win power from the Conservative Party in Britain's general election on July 4, said 6,000 branches have been shut since 2015, with only 50 banking hubs so far opened under a voluntary arrangement with banks including the big four of HSBC, Lloyds, NatWest and Barclays.
Rachel Reeves, who would become Britain's finance minister if Labour wins, said she would give the Financial Conduct Authority (FCA) new powers to support LINK, Britain's largest cash machine network, to proactively source new locations for 350 hubs over the next five years.
It would also make it easier for communities to qualify for a hub, Labour said.
The Conservative government has already approved a law tasking the FCA to ensure reasonable provision of cash deposits as the volume of payments in Britain that do not involve cash rose from around 46 per cent to 86 per cent in the decade to 2022.
"The Conservatives have a clear plan to protect Access to Cash. We have taken the bold action to ensure we are on track to deliver 225 more banking hubs, ensuring peace of mind and financial security for people," Bim Afolami, Financial Secretary to the Treasury, said in a statement.
"More must be done to improve the timely delivery of services where cash access gaps have been identified," the FCA said in an Access to Cash consultation paper in December on draft rules.
The FCA is due to set out final rules in the third quarter to make it harder for banks to shut a branch if no alternative source of cash is in place. (Reuters)
