RBS the first U.K. bank to impose negative interest rates on some clients

BUSINESS

RBS the first U.K. bank to impose negative interest rates on some clients

The Associated Press Published Saturday, August 20, 2016 1:36PM EDT

Royal Bank of Scotland in the City of London

In this Friday, Aug. 3, 2012 file photo, a woman walks by an office of Royal Bank of Scotland (RBS) in the City of London. (AP / Sang Tan)

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LONDON -- Royal Bank of Scotland says it will charge some corporate customers for accepting their deposits -- the first U.K. bank to impose so-called negative interest rates after the Bank of England slashed borrowing costs to spur investment.

RBS, bailed out by taxpayers during the financial crisis, says negative interest will apply only to the overnight rate for a limited number of institutions that are required to have money on deposit to complete futures trades.

RBS said Saturday it "will now be passing the cost of holding such deposits onto a limited number of our institutional clients."

The Bank of England this month slashed its benchmark rate to a record-low 0.25 per cent as part of a package of stimulus measures to boost confidence following Britain's vote to leave the European Union.