HUNDREDS of thousands of customers were barred from today from using their bank card to withdraw money from cash machines operated by rival banks.

The move by the Royal Bank of Scotland and NatWest Bank will save millions of pounds in fees they pay when customers use ATM machines at other banks.

The controversial ban affects customers who have a basic bank account – created for people who have difficulty managing money.

Account holders are not allowed overdraft facilities or a cheque book and the banks will not honour direct debits and standing orders if customers don't have sufficient funds in their accounts to pay for them.

However, customers with basic accounts don't pay bank charges and until today were able to use their bank cards to access funds from cash machines operated by other banks and building societies.

But the RBS Group – it includes the Royal Bank of Scotland and NatWest – has to pay up to 30p each time a customer uses an ATM cashpoint machine belonging to a rival.

RBS chiefs say the cost of retaining the status quo for customers who enjoy free banking is "unsustainable" because they can no longer afford to subsidise them, especially now it's owned by the taxpayer whose cash bailed it out during the banking crisis.

Allan Hardie, head of current accounts at the NatWest, has told customers affected by the ban they can continue to withdraw money from more than 8000 NatWest and RBS cash machines in the UK.

Both banks also have machines in supermarkets while money can be withdrawn at any Post Office.

The RBS banking group has around 10million customers of which less than 10% will be hit. A spokesman said: "Our basic account customers will continue to have free access to one of the largest cash machine networks in the country."

Lloyds banking group introduced a similar ban earlier this year but critics claim the changes affect society's poor.

gordon.thomson@ eveningtimes.co.uk