Banks warn of new fees
RBS/NatWest may charge businesses for deposits
It would be the first time any UK bank had imposed negative interest rates and may be introduced if the Bank of England cuts the base rate below zero.
RBS/NatWest wrote to 1.3 million customers telling them that in such circumstances they could be charged interest on depositing money.
“Global interest rates remain at very low levels and in some markets are currently negative,” says the letter from RBS.
“Dependent on future market conditions, this could result in us charging interest on credit balances. We’ll provide you with the appropriate notice before doing so, should this situation ever arise.”
The Bank of England is expected to cut rates next month after surprising the markets by keeping them at 0.5%. There has been no change since March 2009.
It is also thought there will be more quantitative easing programme as the Bank responds to concerns about a slowdown following the decision to withdraw from the European Union.
RBS said the bank had no immediate plans to charge for deposits.
A 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.”
The European Central Bank introduced negative interest rates in 2014 to prevent the eurozone from falling into a deflationary spiral, while the Bank of Japan made a similar move in January this year.