The Royal Bank of Scotland (RBS), which owns NatWest, has said small businesses could be forced to pay charges on credit balances if interest rates dip below zero.
The BBC reported that 1.3 million NatWest and RBS business and commercial customers received a letter outlining the potential changes. Personal customers’ accounts will not be affected.
In its letter to business customers, NatWest said: “Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging interest on credit balances.”
Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), responded to the proposed changes, saying: “Today’s warning from Natwest and RBS will be deeply concerning to small firms. FSB’s latest research shows small business confidence is already at a four year low. Firms are less optimistic, cutting headcount and curbing investment intentions.
“When the Monetary Policy Committee meets next week to decide on interest rates, we would call on them to do everything possible to consider the implications of changing interest rates for smaller firms and the self-employed looking to maintain or grow their business.”