The Royal Bank of Scotland (RBS) entered unchartered territory for a UK bank in July when it told business customers it might start charging for cash deposits if the Bank of England (BoE) cut interest rates to below zero. Although BoE governor Mark Carney has repeatedly ruled out negative rates, the Monetary Policy Committee edged closer in August when it cut the bank rate to 0.25%.
When its letter to clients became public, RBS released a statement saying: “We will consider any necessary action in the event of the BoE base rate falling below zero, but will do our utmost to protect our customers from any impacts.” It added that there were no current plans to pass negative rates through to personal or business customers.