Eleven high street banks in the UK have now agreed to pay $257million (£180m) over five years to support plans for a ‘Universal Bank’ providing basic banking services for the poor.
The service will offer benefits claimants without bank accounts access to basic banking facilities at 18,000 post offices and the use of bank cash machines. Users will not be able to borrow money on their Universal Bank account.
The banks that have agreed to subsidize the scheme are Abbey National, Alliance & Leicester, Bank of Scotland, Barclays, the Co-operative Bank, Halifax, HSBC, Lloyds TSB, National Australia Bank and Royal Bank of Scotland, which recently bought NatWest.
The UK’s largest mutual building society, Nationwide, will also be involved.
The Universal Bank ran into problems earlier this year when several banks expressed concern over costs, but is now expected to begin operating in early 2003.
The British Bankers’ Association claimed that the agreement by the banks to pay towards the running costs of the service was ‘a significant commitment which shows that banks take seriously their social responsibilities.’
The banks are not expecting to run the service at a profit, although Consignia (formerly the Post Office), hopes to earn $142m a year from servicing benefit payments.
More than 4000 Lloyds TSB employees took part in its Matched Giving scheme last year, according to the bank’s new community report. Employees raised $1.7m for community projects during 2000. Lloyds TSB then doubled this sum by giving the same amount.