Federation of Sub Postmasters Warns of Changes to Bank Deposit Limits

Due to concerns about increased money laundering, in 2022, the FCA took far greater interest in the controls the banks have on money coming in, in particular via the Post Office network, to ensure it was appropriately mitigating money laundering.  This has resulted in the FCA requesting that banks implement tighter controls on deposits via the PO network, and to enhance their due diligence of higher volume customers.

The advice was not mandatory but the following changes have been implemented/seen as a result:

• Increased use of CHIP and PIN for personal deposits

• Introduction of transaction limits at the Post Office counter

• Introduction of cumulative limits (daily, monthly, quarterly, annual) on deposits, set at the customer account level

• Introduction of cumulative limits having a big impact at the counter on legitimate customers

The last of the changes have now started to be implemented by banks following significant pressure from the FCA. 

Santander and Starling implemented changes towards the end of 2022, and from this month NatWest and Virgin are following their lead.  This is having a major impact at the PO counter.   While the banks argue it is only impacting a small % of customers, these are often their highest volume and value customers.

Once a customer hits their daily lodging limit, they are forced to go back to their bank branch, often miles away as so many have closed in recent years.

Customers cannot use the Post Office again for bank deposits until their limit resets.  This is at odds with the years of communication encouraging customers to use the Post Office for cash after a bank closes, and undermines the government’s Access to Access agenda.

There are examples of businesses saying they will stop taking cash as it’s too difficult to bank it, as often it will involve getting to a bank branch sometimes miles away.  This has an effect on customers as transporting cash is a security and insurance concern.

As a result this has a huge impact on access to cash and the knock on impact is that Postmasters will have less business customers to support, which will impact their remuneration and have a detrimental impact on their business.

This all coms at a time when the high street is already very challenging, and deposit services are an important revenue stream for keeping Postmasters viable. Without this business, we risk losing branches.

The NFSP has escalated this issue to the FCA and are waiting for their response.   The Post Office have raised these issues with the banks and through UKFinance. 

The NFSP are arguing that these cumulative deposit limits need to be stopped until a proper exception process is established, so that legitimate customers are not impacted and access to cash is not jeopardised.