According to a new report, the charges being levied by banks of customers to rival banks for using their ATMs poses a risk to free banking.

MPs on the Treasury Select Committee have said that the fees on using rival bank’s ATM will result in reduction in the number of ATMs’ accessible to the customers. It is believed that the customers of RBS and Lloyds are not able to access ATMs of other banks.

The leaders have asked the RBS and Lloyds to remove restrictions on access to their ATM networks and for their customers. Banks including Barclays, HSBC and Santander have said that they will continue to provide basic bank account holders with access to their ATM machines.

RBS Group has responded by saying that it will analyze the report by the committee. It also said that the bank is looking to provide basic account to people, who otherwise would be unable o access banking services in the country. Lloyds TSB and RBS have been named for restricting access to their cash machines.

“The main purpose behind the development of the basic bank account initiative was to improve financial inclusion. It is particularly regrettable that this 'beggar my neighbour' approach may therefore lead to the closure or, in the case of cash machines not operated by banks, change to charging at existing free to use cash machines,” a part of the committee said.