RBS to charge institutional clients for holding cash
- Credit: PA
Royal Bank of Scotland (RBS) is to start charging institutional clients for holding cash, as the lender starts to pass on negative interest rates to its customers.
The bank said it took the decision due to the low interest rate environment.
The move comes after the Bank of England slashed its key interest rate to a fresh low of 0.25% as part of a post-Brexit stimulus package earlier this month.
Retail customers appear to be unaffected by the decision.
Reports suggest the negative rates will be in effect from Monday.
The decision will specifically affect customers with a hand in derivatives trading.
'Until recently, RBS has applied a 0% floor to the overnight rate charged for deposits required by clearing houses for futures trades,' an RBS spokesman for the firm said.
- 1 Norfolk fish and chip shop named one of the 10 best in the UK
- 2 ‘Porn addict’ Norfolk doctor who secretly filmed women struck off
- 3 Vandals smash charity dinosaur trail T.rex and leave kebab in its mouth
- 4 Teenager died after choking on own vomit
- 5 Police break up rave at country park
- 6 5 famous faces who were born in King's Lynn
- 7 Mystery of container ships at anchor off Suffolk coast solved
- 8 Small plates restaurant and bottle shop coming to north Norfolk town
- 9 'Disappointed and angry' - Cricket pitch repeatedly vandalised by bikers
- 10 Anger as three flights between Norwich and Amsterdam cancelled
'However, due to the sustained low interest rate environment, RBS will now be passing the cost of holding such deposits onto a limited number of our institutional clients,' the spokesman added, clarifying that futures are entered into by sophisticated financial investors that are looking to hedge risk.
RBS said about 60 clients will be impacted. Only one customer is a corporate client while the rest are financial institutions.
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: 'The move by RBS reported today would appear to only affect a relatively limited number of investment banking clients.
'We are still a long way from banks imposing negative interest rates on personal customers, which would be a deeply unpopular move, though clearly the direction of travel is concerning for savers.'