Royal Bank of Scotland (RBS) and HBOS are installing around 400 free-to-use cash machines in some of the UK's poorest areas following a report from national charity Citizens Advice which found that customers in deprived communities are being hit the hardest by ATM charges.
According to the research, the poorest people in the UK and those living in remote rural communities are often forced to use fee-charging ATMs because banks have closed branches and removed free units. As a result, many deprived and rural areas are becoming "free ATM deserts".
Fee-charging ATMs were also found to have a disproportionate impact on people on low incomes and those claiming benefits, which are now paid directly into bank accounts.
In 1999 virtually all ATMs in the UK were free, but of the 58,000 cash machines now operating, 40% charge a fee regardless of the size of withdrawal. The average cost per withdrawal at fee-charging units is £1.50, but some machines charge as much as £3.00.
RBS says it is seeking the advice and support from relevant MPs, credit unions and community leaders, to determine where best to put the machines. The bank is also inviting anyone who believes that their area qualifies for a free-to-use cash machine to register their request on a dedicated Web site.
Gordon Pell, chief executive, retail markets, RBS, says: "The initiative is designed to ensure that the most vulnerable in our society, the elderly, disabled, those of limited financial means or whose benefits constitute all or the bulk of their income, have free access to their cash close to their point of need."
HBOS says it will install 100 new ATMs in poor and rural areas in Scotland and Northern England. The ATMs will be sited in areas where there are currently only surcharging machines. The bank says its research shows there are 201 deprived areas in Scotland that are serviced solely by fee-charging ATMs and a further 199 in the North of England.
Shane O'Riordain, general manager, HBOS, says: "We are commited to installing ATMs in deprived communities in our traditional heartlands. We will focus on those communities serviced only by surcharging ATMs."
HBOS says it will work with RBS to install free ATMs in order to ensure maximum coverage in derived communities.
In response to the Citizens Advice report, HSBC has also said that it will invest £50 million in installing new fee-free cash machines in at least 10% of the country's "free ATM deserts".