RBS pledges to maintain overdrafts for small businesses

25-11-2008

RBS pledges to maintain overdrafts for small businesses
The Royal Bank of Scotland (RBS) has announced measures to help small businesses with their financing needs.

The UK's second biggest bank said it would not raise current overdraft rates and would maintain existing facilities until next December.

Last week, RBS' shareholders approved the £20 billion bailout package from the government which could lead to the state holding the largest equity stake in the bank.

Speaking about the move, Federation of Small Businesses spokesman Stephen Alambritis told the BBC that he expected other banks to take similar measures now that a rival has acted.

He told the broadcaster: "Now is the time for them to wake up to the fact that they have been rescued, so that in turn they can rescue small businesses.

"Small businesses are aggrieved at the way they have been unfairly treated by the banks and they expect the government, which now has a stake in the banks, to resurrect that balance."

A spokesman for the British Banking Association (BBA) said the move would help businesses with their cash flow needs.

RBS, Lloyds TSB and HBOS received a total of £37 billion in support from the treasury in October as the government acted to restore confidence in the banking sector.

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