Banks: It's their profit, and your loss

HOW TIMES CHANGE. When I opened my first bank account people wore a suit and tie to visit their bank manager. He was a respected member of the community, like doctors, dentists and policemen. If you needed to borrow £20 (and £20 was enough to buy a house in those days), you sat in his office, explained what you wanted the money for and nine times out of ten, he handed over the cash.

Today, policemen spend their time changing the film in speed cameras, dentists refuse to take National Health patients and banks refuse to give you their phone numbers, let alone the name of the manager. The reasons for these changes are, in order, greed, government incompetence and computers.

In the 1960s, banks offered a personal service. Pay in a cheque and the cashier would write the details down in a ledger. There were computers, but these were limited to million pound mainframes at head office, locked securely in air conditioned rooms the size of tennis courts. The nearest any customer came to one was receiving a monthly bank statement through the post. Branches were only open from Monday to Friday and shut at three thirty in the afternoon so the ledgers could be checked by men with adding machines.

I remember the first cash machine I used. The cash card was made of real card and the ATM simply sucked in the card, punched a hole in it and spat it out along with £20 - a week's wages in those days. When the card had ten holes in it, the bank gave you a new one. The ATM didn't even have a screen - messages were displayed on a moving belt that lumbered to and fro telling you what to do. This was state of the art stuff.

But no one complained about the service. The branches were fully staffed at lunchtime by people who actually knew your name and while it took three days for a cheque to clear, this wasn't seen as a very big deal.

Today, banks are almost totally automated and most of their branches have been closed and turned into trendy wine bars. Funds can be transferred around the world in a fraction of a second. Their computers use encryption and more security technology that you can shake a stick at, so everything happens safely, and instantly.

So why does it still take three days for a cheque to clear today? And that's three working days - pay a cheque in on Friday and you're lucky if you can have the cash before the following Wednesday. What the heck is this 'working days' crap? Do banks give their computers the weekend off?

A friend in the US sent me some money last week using PayPal. It arrived in my PayPal account a couple of seconds after he'd pressed send. I immediately transferred the money to my bank account electronically. It didn't take three days to clear, it took five. Five stinking working days. That's an entire week. The money that had left his account in Memphis last Wednesday evening finally arrived in my bank account today.

Of course, the money hadn't been sitting in an envelope waiting for someone to count it, the instant it left his account it was earning the bank interest. There's a financial term for this process. It's called robbery.

Due to the delay in transferring the funds, a standing order for £10 was bounced. The bank's computer had obviously incurred considerable work in handling the message pair in question - Computer one: "Please pay me £10 from this account". Computer two: "Sorry, Dave, I can't do that."

Now, electronic transactions this complex obviously have to be paid for by someone. Me. The bank 'regretted' having to charge me £18.90, but I found their regret scant consolation for paying twice the amount in question for the privilege of not having it paid at all.

Perhaps someone can tell me exactly what service - other than to their own shareholders - banks actually offer these days. It used to be said that a bank loan was like an umbrella - the bank was happy to offer you one when it was sunny, but as soon as it started raining, they asked for it back.

If I approached a bank for a loan to start a new company and handed over a business plan that basically relied on people giving me all their money so I could sit on it for the best part of a week and charge them for the privilege, what would the chances be of me getting the loan? µ