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Monday, September 6, 1999 Published at 13:47 GMT 14:47 UK

Business: Your Money

Bank closures cause concern

Many communities no longer have over-the-counter banking

The Governor of the Bank of England is calling on the UK High Street banks to look again at the effects of closing thousands of branches in recent years.

The BBC's Greg Wood reports: "More than 3500 bank branches have closed"
Eddie George is said to be concerned that many communities do not have access to basic banking facilities.

Mr George is meeting the heads of the UK's biggest banks on Monday, when he is expected to ask them to discuss the impact of the branch closures with community leaders.

Concern has been expressed that the loss of traditional bank services in local communities has led to a rise in loan sharks and pawn shops, as people's access to financial services has become restricted.

More than 3,600 bank branches have been lost since 1990, and another 3,000 are expected to shut in the next five years.

[ image: Eddie George: Meeting bank heads]
Eddie George: Meeting bank heads
As many as 600 communities are estimated to have been left without a single bank branch.

A further 1,000 will lose their last branch over the next five years, according the the Campaign for Community Banking Services.

Rural communities have been hit hard say campaigners.

Only last Friday, Barclays closed its branch in Wheathampstead, Hertfordshire, leaving the village without a bank.

[ image:  ]

People in the North Devon village of Hartland have had to make a 30-mile round trip to their nearest branch since Lloyds closed its branch there in February.

But urban areas, particularly the poorest ones, are also affected.

A survey last year by the New Economics Foundation found that London lost 20% of its branches between 1990 and 1995.

Nigel Cassidy talks to Barclays' John Varley on BBC Radio 4's Today Programme
More than one-third of London wards now have no local branch.

Local business takings can drop up to 25% when a community loses its bank.

But the major banks argue that smaller branches are underused, and customers are turning more and more to telephone and Internet banking.

Reports due

John Varley, chief executive of Barclays' retail services, told the BBC that the bank took its responsibilty to the community very seriously.

He said: "The dominant medium of banking in the UK is branch banking, and we are investing heavily in our branch network at the moment.

"That will remain an important feature of business for Barclays."

Mr Varley said the bank already worked with local communities and would be happy to meet community leaders to discuss their concerns.

The government and the banks are both due to produce reports on access to financial services in the next few weeks.

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