Royal Bank of Scotland to charge corporates for deposits in Britain

 20 Aug 2016 - 2:48

Royal Bank of Scotland to charge corporates for deposits in Britain
A customer using an ATM machine at an RBS bank branch in London.

 

London: Some large corporate clients who bank with Royal Bank of Scotland (RBS) face the prospect of paying to hold cash in their accounts from Monday, a source close to the bank said, the first in Britain to charge negative interest rates on deposits.
The Edinburgh-based lender has contacted some investment banking customers to warn them of the charges, which are expected to hit clients who trade futures and options contracts that must be processed via clearing houses in Europe, the source said.
RBS is passing on the negative rates those clearing houses have charged to handle those trades since the European Central Bank cut its base rate earlier this year, the source said.
RBS could not immediately be reached for comment.
The ECB has resorted to a negative deposit rate to try to encourage banks to lend to stimulate Europe’s economy, which is still suffering from the after-effects of the financial crisis.
Banks are seeking to encourage depositors to shift their cash out of deposit accounts into other financial products. RBS wrote to a million business customers in Britain last month to inform them it may have to impose charges on deposits if the Bank of England introduced negative interest rates.
Six of the world’s central banks have introduced negative interest rates, most notably the Bank of Japan and the European Central Bank.

Reuters