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Banks £350m fund to switch RBS customers goes live

The move is part of a wider scheme to boost competition between UK banks.

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A clutch of banks have been given the go-ahead to poach Royal Bank of Scotland (RBS) business customers, in a bid to boost competition between UK lenders.

Eleven banks will take advantage of a £350m fund to tempt RBS’s 110,000 business customers to switch accounts.

The move is part of European Union conditions attached to the £45bn Government bailout of RBS at the height of the financial crisis a decade ago.  

The banks that will be funded to offer incentives to tempt away RBS business customers are: Metro, Santander, the Co-operative Bank,CYBG,TSB, Handelsbanken, Arbuthnot Latham, Hampden & Co and digital bank Starling.

The fund is operated by the Banking Competition Remedies (BCR), who administer a total of £775m set aside by RBS to promote UK banking competition , where both business and personal customers are notoriously wary of switching between rivals.

The BCR adds that two more banks, Nationwide and online lender Monzo, are “likely” to join the scheme later this year, after launching full business services.

The scheme went live this week, with rival banks able to tempt RBS business customers using the fund’s resources.

BCR chairman Godfrey Cromwell said the announcement “is an important, on-schedule, milestone. SME [small and medium sized entrepreneur] decision-maker customers will be able to access a diverse range of offers from a broad selection of organisations.”

Last week, the BCR handed out a further £280m to encourage competition in the sector. Metro Bank and Starling took the lion’s share of this fund, pocketing £120m and £100m respectively, while settlements bank ClearBank picked up £60m.

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