NatWest Customers Say Accounts Closed After Applying For Coronavirus Loans | NatWest Group

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NatWest has closed the accounts of some small business clients who have applied for government guaranteed loans to help them get through the pandemic, leaving them in distress and unable to access their money.

Several clients of the 62% taxpayer-owned bank contacted the Guardian to complain that their accounts had been suspended or closed without explanation after filing for a loan.

The bank said the reasons for closing the accounts were valid, but the closings came after customers were approved for loans and expected to receive the money in their accounts.

Instead, customers said their money was blocked without warning, with one saying he could no longer afford food.

The Treasury is set to begin talks with the UK’s biggest banks on a plan to help tackle the tens of billions of pounds of bad debt expected to result from the Bounce Loan Program (BBLS), which requires only minimal checks on the borrower’s capacity. for repay.

More than a million businesses have borrowed £ 32.8 billion in just two months under the BBLS, which offers small businesses 100% government-guaranteed loans worth up to £ 50,000 at an interest rate of 2.5%. There are no fees or interest for the first 12 months.

The Office of Fiscal Responsibility recently warned that up to 40% of loans could default. If that happens, it could cost taxpayers £ 16 billion.

The NatWest group was responsible for more than a fifth of the loans in the three government guaranteed loan programs. However, it was claimed that the bank initially struggled under the weight of loan applications and that the fraud checks that needed to be carried out were problematic.

NatWest is bracing for a wave of bad debts and is expected to tell senior executives on Monday to save up to £ 3bn in costs over the next five years. The bank, which changed its name from RBS last week, is expected to make plans to cut its annual operating expenses from £ 7bn to £ 4bn.

It is not known how many accounts were closed as a result of rebound loan applications, nor why NatWest froze existing clients’ accounts after they were approved for a loan.

Twitter users have claimed in recent days that NatWest closed their accounts after approving the rebound loans. Meanwhile, a Facebook group called “NatWest closed my account” that was set up in January now has over 1,300 members, many of whom are posting similar statements.

NatWest said, “We know these are difficult and stressful times for our smaller business clients, and we work tirelessly to implement government programs in a safe and robust manner, successfully supporting 23% of all loans in all three programs. Unfortunately, not all applications are eligible. “

Of the three cases the Guardian forwarded to the bank, the NatWest spokesperson added, “Investigations confirm that the reason for closing the accounts of these specific clients is valid.”

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