ROYAL Bank of Scotland has said it has no current plans for charging businesses to deposit their cash but stands ready to take any necessary action in future.
The bank was commenting on a letter sent to RBS business customers north of the Border warning that if the Bank of England cut interest rates below zero, businesses might have to be charged an interest rate instead of being paid one.
It comes as economists predict that the Bank’s monetary policy committee will cut the base rate from 0.5 per cent to 0.25 per cent at its meeting next week, with a handful forecasting a 0.5 per cent cut to zero.
An RBS spokesman said: “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.
“We have no current plans to pass negative rates through to personal or business customers.”
The letter, signed by the bank’s Stuart Johnstone, head of product and capital management, commercial and private banking, said: “Global interest rates remain at very low levels and in some markets are negative.
Dependent on future market conditions, this could result in us charging interest on credit balances. We will provide you with the appropriate notice before doing so, should this situation ever arise.”
Mr Johnstone signed off with the assurance that the bank values its customers but would be happy to let them leave at no cost and go elsewhere in these circumstances.
But analysts said small businesses would find themselves potentially trapped.
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