Warning on RBS move to restrict cash machine use

The decision to stop some customers using other banks’ cash machines by the Royal Bank of Scotland could create a “domino effect” with other big banks following suit, the head of Nationwide has claimed.

Nationwide director Mark Rennison said the move could become common practice, after RBS decided to limit access to about 10 per cent of its account holders.

In a letter to SNP MSP John Wilson, deputy convener of the Scottish Parliament’s economy committee, Mr Rennison said: “This could lead to a situation where all other banks and building societies may have to impose similar restrictions on basic account holders.”

RBS said it was “unsustainable” to offer free access to other banks’ machines to all account holders. Lloyds has adopted a similar policy. Banks currently charge each other up to 30p when a customer of another bank uses one of their machines.

Mr Rennison added: “The interchange fee is paid by a bank or building society when a card issued by them is used in a different provider’s ATM.

“If a Nationwide customer uses an RBS ATM to withdraw cash or check the balance we pay RBS a fee of between 20p and 30p, to help cover costs such as installation, maintenance and servicing of that ATM; and vice versa if an RBS customer uses a Nationwide ATM, we will receive the fee.

“The combined impact of the decision by RBS/NatWest and Lloyds Group, will make it less viable for other banks and building societies to continue to offer a full ATM service for their customers.”

Mr Wilson said banks risked “alienating” their customers, insisting that poorer people and those living in the countryside would be worst affected by the changes.

He said: “The blow will be particularly felt by those on low incomes and people in rural communities.

“This will affect the most vulnerable in our society and indeed undermines the banks’ own customers.

“At a time when banks like RBS should be trying to rebuild public confidence and their relationships with customers, this action is alienating those who rely on their services.”