Letter: A noteworthy change for ATMs

YOUR reported news that banks are to include £5 notes in their ATMs is refreshing and long overdue (News, 27 March).

Over the past decade, British banks have unilaterally abdicated their historic responsibilities as guardians and facilitators of the UK's money distribution mechanisms. The result is that the retail sector has become the involuntary middlemen who keeps the public supplied with 5 notes, when it has neither the systems, resources nor motivation to maintain the note circulation in good order.

Retailers are charged handsomely by their banks if they wish to exchange higher denomination notes for 5 notes. Hence, to avoid those charges, retailers tend not to pay 5 notes, of any quality, into their bank accounts as they require them to provide their customers with small change from the 20 notes proffered for newspapers and the like. Already scruffy 5 notes therefore keep recirculating well beyond the time at which they should be repatriated to the issuing banks for destruction. It is little wonder the quality of 5 notes in circulation has become a national disgrace.

Scottish banks now also have little or no regard for their solemn promises to pay on their notes, signed by directors or senior management. For legal and historical good reasons these promises to pay "on demand" relate to presentation for payment at the Head or Registered Offices of the banks. In the case of Bank of Scotland it cannot now comply with that promise as its Registered Office is no longer open to the public - yet another reflection of an ill-thought decision by its disgraced and now departed senior executives.

In light of the banking crisis that unfolded a couple of short years ago, the promise to pay on banknotes requires more than the cavalier lack of respect afforded to it by the issuing banks. Bank of Scotland was within a few hours of total collapse. Had it not been quickly bailed out by the taxpayer, holders of its banknotes would have beseiged its head office demanding it honoured its "promise to pay on demand" commitment, to discover that the doors were firmly closed to the public.

Professor J Robin Browning, ex-General Manager of Bank of Scotland, Edinburgh