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RBS lending pledge to small firms | RBS lending pledge to small firms |
(about 10 hours later) | |
The Royal Bank of Scotland, Britain's second biggest bank, is to guarantee overdraft rates and contracts for its business customers for at least a year. | The Royal Bank of Scotland, Britain's second biggest bank, is to guarantee overdraft rates and contracts for its business customers for at least a year. |
It is the first bank to promise not to withdraw its lending facilities in an effort to help its 1.1 million business customers survive the downturn. | It is the first bank to promise not to withdraw its lending facilities in an effort to help its 1.1 million business customers survive the downturn. |
The move has been welcomed by politicians and small businesses. | The move has been welcomed by politicians and small businesses. |
But there are fears the pledge may have come too late for many firms already suffering from rising borrowing costs. | But there are fears the pledge may have come too late for many firms already suffering from rising borrowing costs. |
'Businesses aggrieved' | 'Businesses aggrieved' |
RBS, which also owns NatWest, has been hit hard by the global financial crisis. | RBS, which also owns NatWest, has been hit hard by the global financial crisis. |
Earlier this week, its shareholders voted to accept a £20bn government bail-out of taxpayers' money. | Earlier this week, its shareholders voted to accept a £20bn government bail-out of taxpayers' money. |
The vote means the government could end up taking a stake of up to 60% in the troubled bank. | The vote means the government could end up taking a stake of up to 60% in the troubled bank. |
The BBC's business correspondent Joe Lynam said the fact that a bank was making a public pledge to honour agreed overdraft facilities was a measure of how badly the credit crunch had impacted on normal lending practices. | The BBC's business correspondent Joe Lynam said the fact that a bank was making a public pledge to honour agreed overdraft facilities was a measure of how badly the credit crunch had impacted on normal lending practices. |
The banks are like battle tankers - they are very slow to move but once one of them moves, it's good news Stephen Alambritis, Federation of Small Businesses class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5703">Send us your comments | |
Stephen Alambritis, of the Federation of Small Businesses (FSB), said other banks should follow suit. | Stephen Alambritis, of the Federation of Small Businesses (FSB), said other banks should follow suit. |
"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," he said. | "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," he said. |
"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." | "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." |
He said he was confident other banks would follow RBS's lead. | He said he was confident other banks would follow RBS's lead. |
"They have a great tradition of copycat tactics. The banks are like battle tankers - they are very slow to move but once one of them moves, it's good news," he added. | "They have a great tradition of copycat tactics. The banks are like battle tankers - they are very slow to move but once one of them moves, it's good news," he added. |