Free banking could controversially END in the UK as the City regulator paves the way for a shake-up. The Financial Conduct Authority (FCA) has said it “would not stand in the way” of moves to end the free banking model if lenders chose to offset rising regulation costs by charging fees.
Chief executive, Nikhil Rathi, said: “We have always been clear that if business models need to change in response to competition and a changing market, we would not stand in the way.” He added: “The ‘free-if-in-credit’ banking model in the UK is a market and commercial decision not a regulatory requirement, other than for basic bank accounts.”
Simon Youel, head of policy and advocacy at Positive Money, said: “Banks’ margins are hardly being squeezed, with lenders enjoying record profits driven by higher interest rates which they’ve withheld from depositors. It is bad enough that banks are cutting access to in-person services with branch closures – cutting access to free current accounts as well would be another big slap in the face to the public.”
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Mr Rathi said the FCA is also looking at taking a more lenient approach with financial institutions which may be guilty of mis-treating customers. He said the regulator would be “pragmatic” when enforcing the rules and look “favourably on firms that have made reasonable efforts to address concerns”.
In reply, a Brit wrote: “Banks make a lot of money from the money we have in their system. Do we get a share of that? Of course we don’t. We should all start demanding to be paid in cash and demanding to pay bills, such as council tax, in cash.
“They’d have to open offices in towns so they can collect their money and banks wouldn’t have control of our money to make more money for themselves. We should demand to pay cash for online orders – cash on delivery.”
A second said: “They are taking away our freedom of choice in their rush to cancel cash. There will be trouble ahead!”
