NatWest closes business bank account without warning

c0ver_p0int

Today we have been notified that the business bank account we had with NatWest for 5 years is being closed. It was a perfectly run account with good turnover. There is a overdraft which was used well within the limit and never gone over the limit. Part of it was used to expand the business.
Now suddenly we have to repay the overdraft although they had charged a fee to provide the overdraft till October.
As a small business the market has been improving continuously since 2011. If we close down the business due to lack of banking or having to repay the overdraft earlier than expect that 6 people in to umemployment (excluding their families).
This is a warning to all small business be very careful about opening a business account with NatWest. I have been told Barclays or Metro bank give good business accounts.
Has anyone had this experience? Can a complaint be made to banking ombudsman? Does the business secretary know how RBS/ Natwest work?

gb12345

c0ver_p0int wrote: »

Can a complaint be made to banking ombudsman?

Unlikely as NatWest appear to have made a commercial decision that they no longer want your business for some reason - which they are perfectly entitled to do.

Also overdrafts are repayable on demand, so you have no area for complaint on that either.

c0ver_p0int

That's not providing a service. If we knew that' s how they behave, would never have opened an account with them and paid fees and charges over the years. It was a waste of time.
If interested in providing a service, they should have talked to us and learnt about the business to get an understanding and not act without warning.

matttye

c0ver_p0int wrote: »

That's not providing a service. If we knew that' s how they behave, would never have opened an account with them and paid fees and charges over the years. It was a waste of time.
If interested in providing a service, they should have talked to us and learnt about the business to get an understanding and not act without warning.

Pretty sure all banks reserve the right to do that, but it's pretty shady to actually do it without warning.

c0ver_p0int

Googling around it seems I am not unique. This seems to be common practice with Natwest. They should not be allowed to provide business accounts as this is a spanner in the works of a well run business. This is business interruption. If they force us to close the business 5 more people will be added to unemployment register (& the families?). As funded by the government I thought they had a responsibility to make the economy grow.

ILW

Have you spoken to them for a reason why?

Sounds unusual just to close an account without warning.

gb12345

c0ver_p0int wrote: »

As funded by the government I thought they had a responsibility to make the economy grow.

Unfortunately, as a business, their responsibility is to their shareholders, who just happen to include the taxpayer.

How much notice have they given you for the account to be closed?

c0ver_p0int

7 days from their letter, which arrived 7 days from the printed date.
There are other issues here. To hold a UK banking license and as an entity regulated by the FSA there is such thing as Treating Customers Fairly (TCF) rules. I cannot see how a UK bank can get regulation if they treat any business (just not me) as arbitarily as they have.
Only reason I have been given is that they were not happy with the account; when we cannot find any reason, other than sticking to their limits. At least have the decency to give a proper explanation (e.g. you were using the overdraft too many times etc.) then we could have corrected it.

mulronie

c0ver_p0int wrote: »

There is a overdraft which was used well within the limit and never gone over the limit. Part of it was used to expand the business.

That is not what overdrafts are for.

Frankly I'm not surprised they killed the relationship.

As a corporate credit manager, I wanted to see overdrafts being used from time to time, and paid off - being used for their purpose of smoothing out cashflow rather than make asset purchases/investments.

Any client seen to be using their overdraft as a form of extended financing would have it removed.

If they valued your business, you would have been invited to present a business case for a more appropriate term loan. There is no regulation, however, obliging a bank to value your business.

dalesrider

Thread title....
NatWest closes business bank account without warning

c0ver_p0int wrote: »

Today we have been notified that the business bank account we had with NatWest for 5 years is being closed

So in that letter have they given you a date for closure.....

Thrugelmir

c0ver_p0int wrote: »

7 days from their letter, which arrived 7 days from the printed date.
There are other issues here. To hold a UK banking license and as an entity regulated by the FSA there is such thing as Treating Customers Fairly (TCF) rules. I cannot see how a UK bank can get regulation if they treat any business (just not me) as arbitarily as they have.
Only reason I have been given is that they were not happy with the account; when we cannot find any reason, other than sticking to their limits. At least have the decency to give a proper explanation (e.g. you were using the overdraft too many times etc.) then we could have corrected it.

An overdraft is not designed to be used as a permanent lending facility. (I note that you've used it to expand the business).

Have you asked if the overdraft can be converted into a loan?

When did you last provide them with the Companies accounts or meet with your relationship manager.

Have you considered switching to invoice discounting to fund your business?