f you have a commercial account with Royal Bank of Scotland you may have received a letter from them introducing a banking switching scheme, incentivising you to move your business elsewhere – why, we hear you ask?
Following the financial crisis in 2008, the RBS was given financial support by the government. As part of the deal, a number of measures were put on RBS, including the promotion of greater competition in the market for small and medium-sized enterprises (turnover of up to £25m). The "Business Banking Switch" has therefore been formed by RBS in order to comply with the measures. This provides a fund for certain "challenger banks" in order to incentivise eligible customers to switch their accounts (including loans) from RBS.
The "challenger banks" include Clydesdale Bank, Metro Bank, TSB Bank, Santander, Co-op Bank (this list is not exhaustive). If you have not received a letter from RBS, the headline offers from participant challenger banks will be visible through a new RBS site which is now live.
The amount of incentive that a challenger bank will receive for each eligible customer is determined by the customer's turnover and, if applicable, the outstanding balance on the loan product. For a current account, the incentive can range from £750 up to £50,000 per entity. The incentive for loan products will be calculated by multiplying the outstanding loan balance x 2.5%. Support for professional costs can be up to £10k legal costs on a like-for-like basis and up to £1,200 per property valuation.
The following link will take you to the RBS dedicated website where you can register your interest in the scheme: https://www.business.rbs.co.uk/business/business-banking/business-bank-accounts/business-banking-switch.htmlIf you have any queries, do not hesitate to get in touch.