Small firms treated 'abysmally' by RBS

By THIS IS MONEY
Updated:

 

MORE than a million small businesses with current accounts at Royal Bank of Scotland are being denied interest payments on their balances, despite a Competition Commission ruling that it should be paid from the start of this year.

The Office of Fair Trading is to investigate the tactics of the bank, which has more small business customers than any of its rivals.

RBS and its NatWest subsidiary are accused of imposing obstacles that could deter small companies from claiming their right to interest payments. Royal Bank of Scotland Group last week reported a staggering growth in profits of almost £5 billion.

The Competition Commission ruled last March that the big banks should pay small business customers interest at 2.5% below base rate or offer reduced banking charges from January 1 this year.

Lloyds TSB, HSBC and Barclays changed their accounts for small firms in line with the report.

But business customers at RBS/NatWest were sent a detailed form last December before they could switch to the bank's new interestbearing account from January.

Nick Goulding, the chief executive of the Forum of Private Business, said: 'The way RBS treats business customers is not in the spirit of the Commission report. We have referred the matter to the OFT.'

An RBS spokeswoman said the bank would pay customers quarterly from the end of the month. She was confident that the bank was meeting the requirements of the Competition Commission.

Stephen Alambritis, head of parliamentary affairs at the Federation of Small Businesses, said: 'RBS/NatWest has dragged its feet on these reforms.

'It is the biggest player on the scene and has treated small firms abysmally. To ask people to write in is ridiculous.'

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