Royal Bank of Scotland may set deposit charges

Royal Bank of Scotland — which is owned by the UK — has told more than a million business customers that it may have to impose charges on deposits, which would make it the first British bank to introduce negative interest rates.

The Bank of England is expected to cut interest rates to a record low next week, prompting RBS to write to about 1.3m business customers this month warning that they may have to pay the bank to look after their money if the base rate slips below zero.

“Global interest rates remain at very low levels and in some markets are currently negative,” said RBS in one of the letters. “Dependent on future market conditions, this could result in us charging interest on credit balances.”