§ 8. Mr. Richard Ottaway (Croydon, South)If he will introduce legislation to provide for the payment of interest on inter-bank transfers. [106889]
§ The Economic Secretary to the Treasury (Miss Melanie Johnson)I have no plans to introduce such legislation.
§ Mr. OttawayNotwithstanding banking practice, there is an important consumer point. It takes at least three days to transfer money from one bank to another. During that time, the owners of the money do not have access to it, they cannot use it and they do not earn interest on it. Under those circumstances, will the Economic Secretary conduct a review to find out where that money has gone and who earns the interest on it?
§ Miss JohnsonThe hon. Gentleman is right that cheque clearance takes, on average, three days to complete, but he is incorrect to say that there is a disparity between the money going into the account and it being received at the other end. Funds commonly reach the payee's account and attract interest, if appropriate, on the same day that a cheque is presented or an electronic transfer made. The Association of Payment Clearing Services believes that the majority of banks make no profit from the clearing process.