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Archive for October, 2016

Withdrawing Large Sums of Your Own Money? Not a Chance

Run on the banks (in the UK) cannot happen and “war on crime” is a convenient excuse for it

Fiscal issues in the UK are a hot topic. The Pound/Sterling has been in a freefall since the Brexit vote (see this chart) and Brexit politicians — people like David Davis and Theresa May — can probably make a lot of money trading/swapping currencies while they make our policy. It’s like they have insider information because it’s them who call the shots and can rock the Pound with just a stroke of a pen or some words uttered to the media.

Falling Pound/Sterling is no laughing matter. Depending on what currency one compares it to, the currency here lost nearly 20% of its value in just a few months. Can one take one’s money out of the bank while it still (potentially) has a higher value? Not quite. It is almost as though you need to ask for permission to get your own money.

Remember what happened in Cyprus a few years ago. It’s a European (ish) country whose economy was collapsing. It used daily limits to impose — in a rather Draconian fashion — sanctions on people whose savings would soon be confiscated by their government. It looked like a movie plot or fiction, but even in a sane world with no hyperinflation such a thing can already happen.

Both Halifax and Nationwide, banks with which I have active accounts, impose limits which they do not state upfront, except perhaps in the fine prints somewhere. Natwest never really had such limits, at least not in theory. I closed my main/current account there and stopped paying anything into it.

Natwest’s practices are not the important topic here. But its services can be appalling sometimes. If a person tells you that withdrawing the money should be possible the following day and you even bring all the documents he or she asked for (after consulting higher up workers), then you might expect a withdrawal to be possible. But no. They put barriers and additional requirements just to put some more barbwire around the money — the same money you deposited there.

Treating everything as suspicious by default (or until proven otherwise) is unwise. It makes services rather appalling when the customer is assumed to be dishonest or dodgy. It’s almost as if war on drugs or whatever now justifies limiting people and their access to their own cash. In hypothetical case of financial emergencies, these pretexts can suddenly be exploited for other reasons like preventing a run on the bank.

Did I manage to get money out? Yes, but barely. At numerous points I was driven close to the point of surrender, but I kept insisting and escalating through three layers of management in two different banks. The process which all in all took about three hours (minimum) involved all sorts of forms which include the equivalent of financial surveillance or essentially the tracking of all payments, including cash payments. It is not hard to foresee a future which is not just optionally cashless but one in which this becomes obligatory. Nowadays when you purchase not only a flight ticket but also a rail (train) ticket they ask questions like purpose of travel as if that matters at all.

To specify some of the finer details: 3 trips to Natwest were required in addition to one online. Nationwide was two trips and two instances of online access. Halifax was a short trip and politely arguing with management took over an hour, putting aside queuing and long periods of waiting time for those who were with me (family). This whole ordeal reinforced my claim that Natwest has become a terrible bank that makes false promises and does not provide a service if there is nothing for it to gain from it. I actually left this bank after many bitter experiences (when I joined 16 years ago it was actually okay, as noted several times in the past in this blog) and having to ever visit the bank again for any purpose would give cause for hesitation. One can simply not take their word.

The bottom line ought not be Natwest but the systemic problem and the danger which is banks not having much cash at the back and not dispensing it upon demand from the clients either. Advance notice does not quite cut it as there is a lot of laborious paperwork and the equivalent of interviews (lots of questions) as if one applies for a mortgage when simply asking to withdraw the amount of thousands of pounds.

It is not impossible or implausible that years or decades down the line these mechanisms will get misused to separate people from their money at times of economic panic.

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