The closure of a bank can have serious consequences for customers. People often feel that they are suddenly on unsafe ground and their money has disappeared or is no longer accessible.
How safe is my money in the bank?
There are a number of reasons why the safety of your money in banks is under concern. A company may find itself in trouble due to poor economic conditions or bad trading practices and be forced to close up store. In such cases, it is important for customers to know how to preserve their money.
Fortunately, there are some protections that should protect bank customers from closing bank due to crisis situations. The first thing you should do is to diversify your money. This means that you should not put your money in only one bank. Instead, you should have several accounts at different banking institutions. This way, you minimize the risk of losing all of your savings.
Another way to ensure that your money is safe is to use deposit insurance arrangements. This essentially means that the government or another institution protects a portion of the money and guarantees that it will be returned to customers. Deposit insurance can vary by country, so it’s a good idea to find out the details.
What happens if a bank goes bust?
The bad news is that if a bank goes bust, customers can lose their money. If the bank is insolvent and has no funds to meet its obligations, this means that account balances will be either completely or partially frozen.
Fortunately, most countries have deposit insurance systems in place. These systems are there to protect customers and refund a portion of their funds. In Germany, the statutory protection is €100,000 per person per bank.
Barclays Bank closure
Barclays Bank customers are shocked and angered by the closure of some of their bank branches.
The company justified its decision by saying that demand for banking services is decreasing due to increasing digitalization and cost pressures. In recent years, there have been repeated adjustments at Barclays to limit job losses. For example, 900 jobs were cut in 2017, 450 in 2018 and 300 in 2019.
Many Barclays customers are concerned about the impact of this decision: they fear that the closure of some branches will make it more difficult for them to access necessary services and they may have to travel long distances to get their money. This is also a difficult situation for employees – especially in times of lockdown, it can be difficult to find a new job.
It is therefore important that Barclays continues to provide high quality services to its customers, while trying to preserve as many jobs as possible. So the consequences of the closed Barclays banks are only as bad as the aftercare for customers.
photo credit: Mumemories/Adobe Stock