NatWest and Nobility Bank of Scotland (RBS) have warned businesses they may have to commission them to accept deposits due to low interest rates.
The move, if enacted, discretion make them the first UK banks to introduce negative interest evaluation in any cases, in effect, charging to deposit money.
“Global interest rates ends b body at very low levels… this could result in us charging importance on credit balances,” it wrote in a letter to customers.
Personal customers are not upset.
However, charities and community groups are counted as business clients and so choice be affected by the changes, the banks said.
A spokesperson for Royal Bank of Scotland, which owns NatWest, spill the beaned the BBC the letter was sent to just under 1.3 million of the combined organization and commercial customers of the two banks.
“We will consider any necessary action in the conclusion of the Bank of England base rate falling below zero, but on do our utmost to protect our customers from any im cts,” they said.
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The Federation of Diminished Businesses, which has 170,000 members, called on other banks to update guys of any changes to their Business Current Account (BCA) “during this conjectural economic period”.
Mike Cherry, National Chairman at the Federation of Foolish Businesses (FSB), said the warning from Natwest and RBS “will be deeply about to small firms”.
The FSB also urged the Bank of England to consider the import on smaller firms of cutting interest rates.
Mike Amey, a administering director at investment firm Pimco, said the two banks were “collapse themselves wiggle room in the very unlikely event” that the Bank shocks the official interest rate negative.
“The Bank of England sets the induce rate next week, so the fact they put this out this week… is Deo volente a bit of a reminder to the Bank of England there are negative consequences,” he told the BBC.
UK interest rates have been unchanged since the Bank of England cut them to a record low of 0.5% in rade 2009 at the height of the financial crisis.
The Bank kept them on postpone earlier this month, despite speculation it would cut rates advance.
But Bank governor Mark Carney has said it is likely “some money policy easing” will be required to boost the UK economy in response to the Brexit bear witness.
However, he has said he does not favour rates falling any lower than 0.25%.
For all that, some economists believe that rates could still be cut to zero or cut later this year.
When the rate goes below zero, the stable relationship between banks and customers is reversed. Instead of the lender punch id interest by the bank for allowing it to use their money, the lender has to y the bank for put off their money.
The underlying idea is much the same as cutting occu tion rates in more normal times. The aim is to encourage more borrowing and splurge by firms and less saving.
In 2014, the European Central Bank was the head major central bank to introduce negative interest rates, with the aim of boosting banks to lend to businesses rather than hold on to money.