NatWest, one of the biggest banks in the United Kingdom, has now implemented a new policy that requires customers to provide prior notice for cash withdrawals, including those from cryptocurrency platforms, exceeding £2000.
NatWest Bank Imposes Crypto Withdrawal Limits
According to a notice on the bank’s door, customers who require “large sums”, which is £2,000 and above, are required to give a 24-hour notice before they can access their funds.
In certain cases, customers would also be required to provide an explanation and documentation as to the nature of their intended transactions, and an adequate “documentation” is to be provided. The documentation would include their debit card and pin, a viable identity card, and payment invoices where needed.
The notice also pointed out that notifying the bank in advance does not constitute authorization to withdraw one’s funds. If the branch is not “satisfied” with the explanation and documentation provided, the branch is allowed to decline the customer’s transaction, refusing them from withdrawing the funds.
According to the bank, the rationale behind such developments is to “keep customers safe and secure”, which brings to question the previous rationale raised by the bank in the aftermath of the Silicon Valley Bank (SVB) collapse, asking if the crypto space was unjustly blamed for the failings of the traditional bank.
The limit will be cross-cutting, impacting clients who use the bank to transact with leading cryptocurrency exchanges and wishing to cash out, through bank transfers, coins like Bitcoin and others.
NatWest bank previously faced media scrutiny during the SVB collapse when it imposed daily limits on transactions and protecting customers from potential crypto scams as the rationale. The bank justified these restrictions by highlighting the use of cryptocurrency by cyber criminals, but recent events have cast doubt on their justifications.
Aside from raising doubts, the development also raised concerns about the excessive scrutiny forced on customers who want to access their funds, supporting the speculation that NatWest is failing and that the “crypto justification” was a convenient excuse.
NatWest Sets £1,000 Daily Limit
Weeks prior, in March 2023, NatWest introduced a daily limit of £1,000 and a 30-day payment limit of £5,000 for cryptocurrency exchanges. They made this decision citing the £329 million losses incurred by UK consumers through crypto scams in the previous year, claiming that men over 35 were a demographic target for such scams.
NatWest’s move to “enhance customer protection” against crypto-related criminal activities was understandable at the time, yet it was also impeding the legitimate use of cryptocurrencies through regulated crypto exchanges, which allowed users freely move in and out of projects, and the crypto space.
This increased the need for financial institutions to strive for balance when protecting their customers, to ensure individual user rights aren’t compromised, and innovations aren’t stifled.