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Banks warn businesses to prepare for negative interest rates

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Natwest and Royal Bank of Scotland have written to business customers warning they may have to charge them to hold desposits as a result of low global interest rates.

This would signal the first time UK banks to introduce negative interest rates, the BBC reports.

The letter, sent to 1.3 million combined business and commercial customers, says: “Global interest rates remain at very low levels… this could result in us charging interest on credit balances.”

Personal customers are not affected.

An RBS statement says: “We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts.”

Markets were expecting the Bank of England to cut the base rate earlier this month, but the central bank said this was now more likely in August.

The interest rate has been at 0.5 per cent since March 2009.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. So will banks start paying interest on overdrawn accounts to balance this out?

    No I don’t think so.

  2. Got a letter from them yesterday. They have already put their charges up by skeg considerable margin across the board and the base rate hasn’t moved yet. It’s just commercial. Good opportunity to talk to firms about corporate life assurance investment bonds, pension funding and the like.

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