Bank closures are leaving a “toxic legacy” in high streets that are already in decline, MSPs were told.
In its first day of taking evidence, a Holyrood inquiry heard how Lochgelly in Fife was haemorrhaging visitors to neighbouring towns, while Crieff in Perthshire has never recovered from losing a bank.
The economy committee is investigating the impact of closures, which has seen a third of branches wound up since 2010.
Taxpayer-owned RBS is looking to shut 62 branches in the coming months, while Bank of Scotland has earmarked 49 for the chop this year.
Barry McCulloch, for the Federation of Small Businesses Scotland, told MSPs on Tuesday that in many parts of Scotland the closures will “thwart attempts to regenerate towns and high streets”.
“It will undeniably impact confidence and have a devastating impact on the local economy,” he said.
He added: “What the traders have seen in Lochgelly, who have lost their last bank, is that shoppers and visitors are now going to Cowdenbeath simply because that’s where a bank exists.”
Mr McCulloch said empty units “blight towns and high streets”, adding: “In Crieff, they have had an empty bank for some time and it has been a real problem site and the impact that has had on a largely affluent town is considerable.”
Mobile vans do not come close to providing the services offered by branches, Mr McCulloch added, and said all businesses in Carnoustie only get their van for 20 minutes a week.
Phil Prentice, from Scotland’s Towns Partnership, says he understands the need for branch closures amid moves towards a cashless society.
But he said there must be a form of last-branch-in-town provision.
He added the departure of banks leaves a “toxic legacy” that can foster a “sense of decline and despair”.
Mr Prentice said they are involved in conversations with the financial giants about the possible gifting of the sites to the community, such as for childcare facilities.
Pete Cheema, from the Scottish Grocers Federation, told MSPs they should stop looking at alternative solutions when the answer is maintaining branches as he called for government intervention.
Mr Cheema added: “The current situation (of branch closures) is having an absolutely devastating effect on local businesses.
“They are having to travel, in most cases, about an hour back and forth.”
The Tayside and Fife RBS branches in line for the chop are Aberfeldy, Pitlochry, Perth South Street, Kinross, Comrie, Dundee Stobswell, Dunblane and Montrose.
Bank of Scotland is closing Lochgelly and Carnoustie.
The Courier is campaigning against the programme of closures, which threaten to cut off vulnerable customers and make life even more difficult for small businesses.
RBS says footfall is dropping and there are “now more ways to do everyday banking than ever before”, including via mobile branches, online and post offices.
