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19th May 2008
Bank charges 'could harm small businesses'
If banks decide to increase charges for small business, many of these firms will struggle to survive, an industry expert has said.
George Derbyshire, chief executive of the National Federation of Enterprise Agencies (NFEA) was commenting after it emerged that RBS plans to introduce a monthly charge of £10 and transactional charges on its Business Banking Direct account.
Mr Derbyshire explained that the price was modest but added that many small firms operated on extremely tight margins and said that any rises in costs could have damaging effects.
"This is just one of a number of cost increases small businesses are seeing - transport, energy and utilities for example - all of which will make life more difficult, especially at a time when consumers are starting to feel the pinch," he explained.
"No doubt the other banks are watching carefully how RBS customers will react. At present the other banks have this competitive advantage over RBS: if they move to follow, they will lose their competitive advantage but gain some revenue."
Recently, Lloyds TSB reported that businesses are not confident about the future of the UK economy.
(c) 2008 Adfero Ltd.
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