NatWest introduces new bank account closure rules ahead of 'debanking' changes
NatWest's CEO Paul Thwaite said the bank has already implemented the extension of notice periods from 60 to 90 days
PA | GETTY
NatWest has extended the amount of notice it will give customers before closing their bank accounts, ahead of new debanking rules coming into effect.
The banking giant will now give customers 90 days' notice before an account is shut, in line with the upcoming legislation.
Currently, banks must give a minimum notice period of 60 days, under the Payment Service Regulations 2017.
The Chancellor Jeremy Hunt said last October that he would change the notice period, increasing it from two months to 90 days.
Under the new rules, banks will also need to give customers "clear and tailored" explanations for why they are closing an account, excluding limited cases such as where it would be unlawful.
Lenders closing an account due to anti-money laundering or terrorist-financing safeguards wouldn't have to provide a notice period or explanation.
Currently, banks must give a minimum notice period of 60 days but new rules are set to come into place
PA
A draft law was proposed last month and Parliament is expected to approve the new rules before the summer. They would then come into effect "as soon as practicable".
The changes were announced after it emerged banks may have been closing the bank accounts of customers based on their political views.
Bank account providers can close accounts, but they must treat customers fairly.
The Financial Ombudsman Service states people must not close an account because of unfair bias or unlawful discrimination.
NatWest chief executive Paul Thwaite told The Telegraph: "I'm pleased to say we've already implemented the extension of notice periods from 60 to 90 days ahead of the draft legislation being implemented.
"I was very keen as a bank that we implemented that as quickly as possible."
GB News has contacted NatWest asking for comment.
Debanking complaints surged over the past year, with a sharp jump in businesses facing account closures.
The Financial Ombudsman received 3,858 complaints linked to the matter over the 2023/24 financial year, according to data published by Parliament's Treasury Committee this month, representing a 44 per cent jump on the previous year.
Complaints were up 69 per cent over the past three years.
LATEST DEVELOPMENTS:
Businesses have seen a particular increase in account closures, the statistics show, with complaints from firms related to debanking increasing by 81 per cent to 666 over the past year.
Dame Harriett Baldwin, chair of the committee said: “When we set out on our inquiry into financing for small and medium-sized businesses, we weren’t necessarily expecting debanking to emerge as a key issue.
“But as they say, you must go where the evidence takes you – and it’s clear there is evidence that some legally operating businesses are being unfairly de-banked.
“Banks should be doing all they can to support small business in this country, not pulling the rug out from beneath them with little warning.
“I expect our report will have something to say about what we’ve uncovered.”
You may like
