To Enhance Financial Security Measures Barclays Implements Cash Deposit Limits Effectively From July

Barclays is being accused of wanting to stop people from using cash by putting strict limits on how much money customers can deposit.

Starting in July, there will be a yearly limit of £20,000 for cash deposits into Barclays personal accounts, including any accounts for children. This limit will reset every January. Any cash deposited at branch counters or self-deposit machines will count towards this total.

Nigel Farage, a former leader of the political party UK Independence Party (UKIP), criticized this change, saying that banks want to get rid of cash and that their actions are shameful.

Barclays is following the example set by NatWest, another bank, which already has a rule limiting cash deposits to £3,000 per day or £24,000 in a year, starting from last September.

Last year, NatWest faced criticism for encouraging a society where people don’t use cash anymore. This happened after they made changes due to a controversy involving Nigel Farage.

Coutts, a private bank part of NatWest, closed Farage’s account because of his controversial views. This led to NatWest’s CEO, Dame Alison Rose, stepping down after admitting she was a source for a wrong story on the BBC.

Cash transactions decline: from 10% to 6% by 2027, per Global Payments Report.

Although Barclays claims the change is to prevent financial crimes like money laundering, critics argue it’s just another way for banks to push customers away from using branches.

Martin Quinn from the Payments Choice Alliance explained that while £20,000 might seem like a lot, think about selling a car and receiving payment in cash – nothing illegal, but the bank might suspect money laundering.

He believes Barclays wants to shrink its branch network, close branches, and push everyone to do banking online. Without branches, it becomes difficult for people to deposit cash safely.

Derek French, a campaigner for community banking, sees this as another rule favoring banks’ administrative convenience over what customers need.

Even before the pandemic, the use of cash was dropping sharply, with more people switching to cards due to hygiene worries.

The Post Office sets a £10,000 limit for personal and £240,000 for business accounts on cash deposits.

According to the 2024 Global Payments Report by Worldpay, cash accounted for 10% of transactions at sales points in 2023, but it’s expected to decrease to just 6% by 2027. The main users of cash are older people and some of the most vulnerable in society.

Last summer, Prime Minister Rishi Sunak stated that every person in the UK should have access to a cash machine within three miles of their home. However, by the end of 2023, there were fewer than 48,000 ATMs in the country, down from over 70,000 in 2016.

A Barclays spokesman said, “We take financial crime and our responsibility to prevent money laundering seriously. We have contacted customers to let them know that from July we are making some changes to the amount of cash customers can deposit into their Barclays accounts,” according to The Telegraph.

The spokeswoman also added, “We have set the limit at an amount that will allow us to better identify suspicious activity, while still ensuring our customers have access to cash.”

Similarly, NatWest mentioned that they’ve updated their terms and conditions to better protect customers, communities, and society from fraud and financial crime.

“We regularly review our policies and aim to balance our responsibilities with our customers’ needs.”

The Post Office has an annual limit of £10,000 for personal customers and £240,000 for business account holders. Santander doesn’t have a specific limit, but they may ask customers depositing large amounts to explain where the money came from.

Santander may question large cash deposits, while HSBC and Lloyds have no immediate changes planned. (Credits: ETimes)

HSBC doesn’t have any plans to introduce a limit at the moment, but they keep their policies under review. Lloyds Banking Group stated that they aren’t planning any changes.

Harriett Baldwin, chair of the Treasury Select Committee, expressed concerns that moving away from cash could make it harder for those who rely on it to access banking services.

A spokesperson from the Financial Conduct Authority (FCA), the city regulator, mentioned that banks need to reduce the risk of their services being used for criminal activities like money laundering.

They highlighted concerns about cash deposits at the Post Office, which led to banks setting limits. While some banks extend these limits to their branches, customers should still be able to use cash services at bank branches and the Post Office.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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