UK Banks Criticised for Cash Deposit Limits
May 15, 2024
UK banks are facing criticism following their decision to limit how much cash customers can deposit each year.
In a ‘ludicrous’ move, as reported by Sky News, Barclays is capping deposits into personal accounts at £20,000 (around $25,000) annually. The change will be introduced from July, and the deposit limit will reset each January. This follows a similar decision by Natwest to introduce cash deposit limits of £3,000 per day or £24,000 in any 12-month period.
Barclays claims the limit is ‘to help it identify suspicious activity’, saying it takes ‘financial crime’ and ‘money laundering’ very seriously. Natwest specifically notes the limits ‘only apply to money [paid] in cash’ and not ‘safe and secure’ electronic transfers. However, these assertions are not backed by modern statistics that show criminals are—unsurprisingly—turning to cashless payments to drive illegal activity.
UK-based organisation We Fight Fraud published a white paper in 2021 titled ‘How COVID-19 Forced Criminal Commerce into the Digital Banking Age’, noting the pandemic accelerated the move of criminals into distance scams and digital money laundering, which now offer greater opportunities than face-to-face crime.
Criminal behaviour has adapted, innovated and evolved... There was an assumption that the decline of cash would make life more difficult for criminals. Our findings show the reverse is true.
The report concluded that: ‘long held assumptions about the cash-based nature of the criminal world need to be challenged.’
Limits on bank customers’ freedom to make cash deposits are also not specific to Britain, with an Australian poker player speaking out after his account was frozen following is attempt to pay in cash winnings ‘well below the amount at which it would become interesting for money laundering or anti-terrorism laws’.
[What disturbs me is] the marginalisation and criminalisation of cash itself—the banks want to make you go cashless and are willing to ‘coerce’ you in order to do that, but also the tactic of freezing your accounts merely for using cash, a legal tender, putting people in extremely vulnerable positions.
There is hope that—given sufficient pushback—businesses may reverse anti-cash decisions, with one example being Allied Irish Banks rapidly U-turning on a decision to make branches cashless following huge public backlash. News of Australia’s Commonwealth Bank planning to go cashless turned out to be fake, but the bank only confirmed this following widespread outrage and threats from customers to close their accounts.
Taking to social media or writing directly to bank leaders and politicians demanding the right to withdraw and deposit cash be defended could be critical in ensuring economies worldwide remain free, fair and resilient.