‘Not easy for charities to switch banks’

More than 120 local charities hold accounts with the bank which has introduced a £10 a month charge for non-personal account customers and a charge of £2.50 for each non-automated transaction from May.

Having spoken to a number of charities affected, Mr Rose believed his initial estimate of £20,000 being taken from charity funds was actually ‘a long way short’.

‘I’ve worked in that industry and, with my banking hat on, I do understand NatWest’s commercial reason, but I see it as moving £20,000 or more from charity funding into NatWest’s bottom line,’ the former private bank manager said.

‘It’s not what we would have expected from them, particularly at the moment.’

Almost all of them, he said, would likely look to move banks as for several – unless they move to another bank – it would hit their accounts very hard very soon.

With charity accounts considered to be relatively high risk, they are subject to a heightened due diligence, making the moving process quite bureaucratic.

The AGC appealed to NatWest on behalf of the affected charities, but the bank remained unmoved.

‘There’s one charity that supports children with disabilities where the parents pay £10 a month to contribute towards the rental costs of a hall,’ Mr Rose said.

‘Each £10 transaction is now going to cost the charity £2.50, so they’re either going to struggle or have to put their fees up.’

There are around 20 other banks that charities could choose, but it is entirely possible in the current economic climate that they may follow NatWest’s lead, although he hoped not.

‘My guess is that those banks with a good corporate social responsibility ethos will do their best to keep providing charities with free banking.’

Some non-high street banks will not take cash, some will not take cheques, but almost all have internet banking so charities are being urged to avoid cash and cheques as much as possible.

During lockdown there was a noticeable move away from cash, reducing the number of donations in counter top boxes in shops.

‘Once the cash habit stops, it seldom restarts,’ Mr Rose said.

‘Charities will probably all need contactless payment devices to collect funds and, like fax machines, pagers and CD players, the popularity of cheques will diminish, so they should think about using internet banking to make payments.’

Beyond this, he said there was not much more the association could do to help.

Quite uncharitable,says bank consultant

FORMER Guernsey bank manager James Blower, who now works as a consultant to start-up banks in the UK, said he was surprised at NatWest’s decision.

‘I’m surprised they’ve gone in this direction so aggressively with no concession for charities – it seems actually quite uncharitable,’ said Mr Blower, who was head of corporate banking at Barclays and then managing director of Clydesdale Bank in the island for five years until it closed in 2013.

‘NatWest seems to be forcing this rather unnecessarily and I can understand why the AGC is up in arms about it.’

Mr Blower said he would understand the decision more if the whole industry was heading in this direction. It would definitely make other banks consider their position, as it was likely none would want to be the last bank to still be offering free banking.