U.K. Treasury Demands Banks Freeze Plans to Phase Out Checks
U.K. Treasury Minister Mark Hoban said plans to phase out bank checks should be frozen until lenders can come up with viable alternatives that won’t hurt consumers or companies.
Any alternatives should be easy to use, widely available and cost-effective, and speed clearing times of the existing system, Hoban said in a letter to Parliament’s cross-party Treasury Committee that was released by his office in London today.
“Until this is demonstrated, I do not believe that there is a coherent case for abolishing checks,” Hoban said. The government will “intervene to protect vulnerable individuals and businesses if there is any threat that checks could be withdrawn without suitable alternatives.”
Usage has declined since 1990, when 4 billion checks were written, to about 1.1 billion last year, Hoban said, citing the Payments Council. He said banks should consider whether replacing the existing system may not be more costly than reforming it.
Royal Bank of Scotland Group Plc (RBS), the owner of the NatWest consumer bank, said it has no plans to abolish checks at the moment.
“RBS NatWest is not going to get rid of checks unless there is a viable alternative and unless customers are ready for it,” Brian Hartzer, Chief Executive of RBS Retail, said in a statement released by his office today.
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