UK Banks Overhaul Account Closure Procedures Amidst Backlash Over Nigel Farage's Account

In response to the controversy surrounding the closure of Nigel Farage's account with NatWest's private bank Coutts, top UK banks have agreed to revamp their account closure procedures and protect their clients' "freedom of expression."

Barclays, HSBC, Lloyds, Santander, Nationwide, and NatWest executives were summoned to a meeting with City minister Andrew Griffith to address the situation.

NatWest's Chief Executive, Alison Rose, resigned after admitting to misleading a BBC reporter about the closure of Farage's account. Pressure is mounting on the bank's Chairman, Howard Davies, to step down following his previous support for Rose.

The Treasury issued a statement after the meeting, acknowledging that recent events have eroded public trust in the banking sector. The attendees expressed their commitment to government policy on account closure and vowed to take prompt action to restore confidence. The banks pledged to uphold the principle of non-discrimination based on lawful freedom of expression and agreed to swiftly improve their account closure policies, even before the implementation of the government's new regulations, whenever possible.

The government's proposed changes include requiring banks to give customers at least 90 days' notice before terminating their accounts. However, banks raised concerns during the discussion about handling abusive clients and balancing the need to prevent financial crime with the swift closure of suspicious accounts.

Additionally, the banks have agreed to enhance their account closure data. City minister Andrew Griffith also called for a collaborative effort between banks, the Treasury, and the Financial Conduct Authority to review how politically exposed persons should be handled.

While these changes aim to address the issues arising from the closure of Farage's account and restore public trust in the banking sector, some financial analysts foresee challenges in balancing compliance with regulations and preventing illicit financial activities. The delicate balance between enforcing anti-money laundering measures and ensuring fair treatment for customers could pose difficulties for banks going forward.

By fLEXI tEAM