NatWest Bank Now Requires Advance Notification For Cash And Crypto Withdrawals Over £2,000

NatWest, one of the UK's largest banks, has now implemented a new policy requiring customers to give advance notice for cash withdrawals over £2,000, including from cryptocurrency platforms.

NatWest Bank Implements Crypto Withdrawal Limits

Customers requiring "large sums" (ie £2,000 and above) must give 24 hours' notice before accessing funds, according to a notice posted on the bank's door.

In some cases, clients will also be required to provide explanations and documentation on the nature of their proposed transactions, and to provide sufficient "documentation". Documentation will include their debit card and PIN, ID if available, and payment invoices if required.

The notice also states that notifying the bank in advance does not constitute an authorization for withdrawal. If the branch is not "satisfied" with the explanations and documents provided, the branch can reject the customer's transaction and deny them access to funds.

The rationale behind this development, according to the bank, is to “ensure customer safety,” calling into question the bank’s previous justification after the collapse of Silicon Valley Bank (SVB), asking whether the crypto space unfairly blamed traditional banks for their failures .

The restrictions will be cross-cutting, affecting customers who use banks to trade with leading cryptocurrency exchanges and want to cash out tokens like bitcoin via bank transfers.

NatWest Bank previously faced media scrutiny during the collapse of SVB when it imposed daily limits on transactions and protected customers from potential crypto scams as justification. The bank justified the restrictions by highlighting the use of cryptocurrencies by cybercriminals, but recent events have cast doubt on its rationale.

In addition to raising skepticism, the development raised concerns about excessive scrutiny of customers who wanted to use their funds, supporting speculation that NatWest failed and that “cryptocurrency rationale” was a convenient excuse.

NatWest sets a daily limit of £1,000

A few weeks ago, in March 2023, NatWest introduced a daily limit of £1,000 and a 30-day payment limit of £5,000 for cryptocurrency exchanges. They justified their decision after British consumers lost £329 million to crypto scams in the previous year, and claimed that men over the age of 35 were the demographic targeted by such scams.

NatWest’s move to “enhance customer protection” against crypto-related criminal activity was understandable at the time, but it also hindered the legal use of cryptocurrencies through regulated crypto exchanges, which allow users to move freely in and out of projects and the crypto space.

This increases the need for financial institutions to strike a balance between protecting their customers, ensuring that individual user rights are not compromised and innovation is not stifled.