Banks tighten limits on cash deposits made at post offices


Several excessive road banks are to chop day by day limits on cash deposits made by their clients at post offices, after the UK’s monetary watchdog put them “on alert” over money laundering.

Allied Irish Bank, Co-operative Bank and Handelsbanken, which enable cash deposits of between £10,000 and £20,000, instructed the Financial Times they might shortly tighten these caps. HSBC and Barclays, which enable most cash deposits of £9,000 and £10,000 respectively, didn’t instantly reply when requested about their plans.

The Financial Conduct Authority set out measures this week making use of to banks that enable clients to deposit cash through post offices. Banks at the moment are anticipated to maneuver in direction of card-based transactions and to cut back the £20,000 cash deposit transaction restrict, amongst different necessities.

The Bank of Ireland — which offers banking companies for Post Office clients — lowered its cash deposit restrict to £2,000 on Thursday.

Deposit limits have been a supply of rigidity between banks and the Post Office, which says legit clients are being penalised and compelled to journey to city centre financial institution branches to entry companies.

“We’ve seen a significant impact on legitimate customers being turned away, unable to do their transactions,” stated Martin Kearsley, banking director at the Post Office. He stated limits have been too blunt a repair, whereas digital identification and “well-known customer checks” could be extra acceptable.

Limiting deposits will assist curb fraud however raises questions in regards to the availability of banking companies as cash use has fallen and financial institution branches shut in favour of digital options.

A Treasury report in 2020 recognized giant cash deposits as an space at “high risk of money laundering”. It stated the Post Office provided fraudsters “greater anonymity” and “less scrutiny” as, in contrast to financial institution employees, they didn’t have entry to a person’s account data once they made a deposit.

The Post Office has performed a outstanding position in plans for shared banking hubs — bodily branches that may deal with the wants of shoppers from totally different banks and assist these in rural and underserved areas. It stated decrease limits would additionally have an effect on these companies.

Businesses usually tend to be affected by adjustments than particular person clients, significantly firms dealing with cash on a day by day foundation. They account for practically half of all cash deposits at the Post Office however deposit bigger sums.

Kearsley stated decrease deposits meant clients would wish to go to branches extra continuously, however in addition they confronted new quarterly and annual limits on cash deposits.

The Federation of Small Businesses, a enterprise lobbying group, stated it supported the FCA’s goals however warned there wanted to be flexibility to make sure legit companies which relied on cash deposit companies weren’t hindered.

“These controls should not unfairly burden small firms or impede their operations,” stated Tina McKenzie, coverage chair at the FSB. “The FCA must keep banks’ approaches under review to ensure small firms can continue to operate efficiently.”

The FCA stated it had labored with companions together with regulation enforcement, business and the federal government to make sure people and companies might nonetheless entry “vital cash services” at the Post Office.

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