When a community loses its only bank the consequences can be devastating.

It is inconvenient, which hits vulnerable people such as the elderly and disabled more thanmost, and can irreparably damage the local economy.

This is because many customers will choose to shop in neighbouring businesses after using the bank.

According to the Campaign for Community Banking (CCB), if a bank closed then retailers can lose up to 30% of their turnover overnight.

This is why the recent spate of branch closures is deeply worrying.

Apart from Barclays, the rest of the “big four” High Street banks – HSBC, Lloyds and Natwest – are cutting their retail network.

Their reasons are different but the results are the same.

HSBC is looking to cut costs by targeting what it claims are underused branches, though its decision to shut banks in Saltdean and Findon Valley, in Worthing, caused outrage in the community.

Royal Bank of Scotland, parent company of Natwest, had to be bailed out by the Government after losing billions in the credit crunch.

It is selling off 318 branches around the country.

Taxpayer-owned Lloyds Banking Group was ordered to sell a fifth of its retail network following its merger with Halifax Bank of Scotland.

But the banking giant has also chosen to shut its entire network of independently-run Halifax branches despite them being a profitable part of the business.

This will leave Patcham, in the north of Brighton, without any banking facilities for miles around.

Paul Foreman, who opened the branch with his brother Neil, cannot understand the decision.

He points out that the bank now has about £8.5 million in funds held in customer accounts since it opened in 2003 and deals with about 100 transactions a day.

It would seem, then, that this Patcham branch would be attractive for one of the new players about to enter the banking market.

Several companies – some familiar, some not – have recently expressed their desire to move into banking.

Many more could join them following the Office of Fair Trading’s announcement in June that it is to review the barriers to entry and expansion in banking to increase competition in the sector.

When Metro Bank opens its doors in Holborn, central London, later this week, it will be the first new bank to open a retail outlet in Britain for 150 years.

The chain plans to expand but it is unlikely to help rural communities. The board of Metro aims to take over large premises at prominent city centre locations, competing for space with retailers such as H&M.

Richard Branson’s Virgin Money is more likely to help out.

It has more than 2.5 million online customers and aims to open 70 branches nationwide in the next three years, with the first expected to open in 2011.

A spokesman said the company’s expansion strategy had yet to be decided but it could target areas without banking facilities.

He said: “At the moment we are trying to understand what opportunities are out there.

“We don’t simply want to be a ‘me too’ bank. We want to offer something different from existing banks.

“We are working on our branch strategy but whatever it is we will have a good geographic spread to serve customers who are currently underserved.”

Other companies looking to take on the existing High Street names are supermarket giants Tesco and Co-operative.

Co-op has run two pilot branches, in Hove and Peacehaven, for the past 18 months.

A spokeswoman said: “We’re really proud of our presence in the East Sussex area and our customers’ response to the facilities has been extremely positive. Many have commented on how good it is to have such an easilyaccessible banking facility.”

While the Co-operative intends to open new branches, Derek French, of the CCB, is pessimistic about the chances of any of the new banks filling the gap left in rural or other underserved communities.

He said: “I don't think any of them are interested in small business banking, which makes up between 30 to 35% of traffic in rural banks.

“This is because it is very time consuming and brings with it security risks because these users tend to bring in large amounts of cash.”

Mr French also dismissed Metro Bank’s chances of providing services for people in hard-to-reach communities.

“They are going for very high footfall sites,” he said.

“They are not going to solve the problem we are talking about.”

He also doubts the ability of Tesco to fill the gap because most of their banking facilities will be inside existing superstores.

In fact, Mr French said almost all the new names in banking would be put off by the expense of opening a brand new site in an out-of-the-way location.

Instead, the CCB is calling for banks to join together to open “neutral” branches so the costs can be shared between them.

Mr French said: “This will make the enterprise economically viable. The concept has already been proven to work in 45 of the 50 US states.”