RBS has failed to fully appreciate the “damage” that will be caused by its decision to close dozens of its branches, a report from MPs has found.
The Scottish Affairs Committee urged the bank, which is majority-owned by the taxpayer, to halt plans to axe 52 branches across Scotland, describing the move as a “devastating blow” to those communities affected.
RBS said the closures were a response to the increasing numbers of customers using mobile and online banking.
The loss of a permanent bank, and the services it provides, cannot be replicated by the occasional visit of a mobile bank or community bankerPete Wishart
However, the plans attracted fierce criticism from local communities, business groups and politicians.
The committee report said the closures would remove “vital services relied upon by businesses and disproportionately affecting vulnerable customers”.
It states: “We are not convinced that RBS fully appreciate the damage these closures will do to the communities and businesses that rely on these branches.”
The committee also called into question the assumptions made by the bank that led to the decision.
Impact assessments carried out by the bank do not provide sufficient information on the situation in relation to individual branches, it found.
“For example, whether customers have access to a suitably reliable broadband connection to allow them to use online banking, the practicality of travelling to the next nearest branch or the effective availability of alternative services such as mobile branches and community bankers,” the report states.
“Without this information we do not see how these documents can be said to have properly assessed the impact of the closures on customers, businesses and communities.”
The committee also questioned how a further 10 branches given a six-month reprieve would be evaluated and on what basis decisions on their futures would be taken.
“Given the lack of information available, it is not currently possible for us to have confidence that this process will be fair and independent,” the report states.
Meanwhile, the committee also urged the UK Government to use any influence as the majority shareholder to pressure RBS to reconsider.
Committee chair Pete Wishart said: “The loss of a permanent bank, and the services it provides, cannot be replicated by the occasional visit of a mobile bank or community banker.
“In rural areas, the local branch is as an essential whose withdrawal is compounded by poor access to broadband and journey time to the next available facility.
“RBS did not consult adequately and even at this last stage should reverse their decision to close these branches.”
He added: “The UK Government has an obligation to represent the interests of the citizens and communities in Scotland that will be harmed by this swathe of bank closures.
“They own 70% of the shares in this company and should use any influence they have to try and have this decision reversed.”
Colin Borland, of the Federation of Small Businesses, said: “The committee rightly recognises that RBS branch closures will have an adverse impact on individuals and communities.
“We are therefore pleased that the committee agrees with us that the UK Government should step in and get some value from its shareholding.”
An RBS spokesman said: “We would like to reassure our customers and the committee that we do understand closing a branch can be difficult for some customers and colleagues who work in these branches. It’s not an easy decision.
“We have listened to customers, colleagues, communities and elected representatives, and welcome the committee’s recognition that we have engaged and responded.
“The way our customers are banking is changing and it is important that we respond to that change.
“Across Scotland, usage of our branches is down 44% since 2011; only 1% of our customers in Scotland visit their branch weekly; and seven in 10 customers are using mobile or online banking.
“We recognise that every customer will have different banking needs and we are committed to ensuring all our customers receive the best possible service.”
An HM Treasury spokesman said: “The decision to open and close branches is a commercial decision taken by the management team of each bank. The Government does not intervene in these decisions.
“But we understand the impact that closures can have on communities and people’s jobs. Banks must now give customers as much notice as possible when a branch is closing, and ensure they are made aware of the options they have locally to continue to access banking services.”