RBS £775m bank fund delayed

The distribution of a £775 million fund to stimulate more competition in business banking is nearly six months behind schedule due to a failure to appoint executive directors on time.

Challenger banks, such as Clydesdale owner CYBG, Metro, Starling and TSB, have been working on bids for the funding to develop new current account, lending and payments offerings for business customers after the UK government said the application process would launch in the first half of 2018,

But the cash, which came from Royal Bank of Scotland as part of conditions attached to its £45 billion bailout during the financial crisis, has been delayed due to recruitment of executives to the newly formed Banking Competition Remedies body (BCR)

The new timeline “reflects the later than anticipated appointment of the two current directors of BCR and the knock-on effects arising”, the BCR said.

Rumours have swirled over difficulties in recruiting for the roles, given the need to find competent candidates without conflicts of interest in the banking sector.

The BCR only announced it had appointed executive chair Godfrey Cromwell and executivedirectorbrendanpeilowat the start of May, and yesterday announced its third appointee Aidene Walsh. Staff, who are still being recruited, will join “over the coming months”.

BCR assured yesterday that after “an intense period of setup” it was now “operationally ready to oversee the package of measures designed to enhance competition in the UK SME banking market”. It will start now accepting bids for funding in November with the awards announced next February.

The delays have frustrated challenger banks who had been expecting to put forward applications by June, but had not been given any details on the format, structure and eligibility requirements.