RBS freezes overdraft charges for SMEs

by Gill Montia

Story link: RBS freezes overdraft charges for SMEs

Royal Bank of Scotland (RBS) has announced that it will freeze overdraft charges for small and medium sized enterprises (SMEs) for one year, from 1st December.

In addition, no demands for immediate repayment of loans will be made, through the withdrawal of existing facilities, during the period.

The bank’s NatWest subsidiary will extend the same terms, which means that up to one million customers could benefit from the pledge, which should make it easier to manage cash flow.

The group will also designate staff that will be available locally to help small businesses experiencing difficult times.

The move follows accusations from a number of quarters that the UK’s banks are failing to help small businesses hit by the credit crisis, despite having themselves received billions of pounds in taxpayer support.

The credit crisis has left the majority of UK banks short of liquidity and in recent months, SMEs across a wide range of sectors have seen their overdraft limits cut and rates increase.