Banking bigwigs appointed to decide bank winners of £425m RBS competition fund
Banking bigwigs Godfrey Cromwell and Brendan Peilow were today appointed to head the body which will decide which small business challenger banks receive chunks of a £425m cash pot put up for grabs by Royal Bank of Scotland (RBS).
Banking Competition Remedies Ltd (BCR) will judge the applications from lenders such as Metro Bank, Virgin Money and Aldermore, with a decision due by the “summer of 2018”.
Cromwell, an independent member of the House of Lords who has previously worked in banking, will be executive chair of the body, after being chosen by an independent nominations committee. Peilow, the former crown representative for banking and payments and ex-Lloyds employee, will serve as executive director alongside an as yet undecided colleague.
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Some digital-only firms, such as Starling and Tide, will also apply for some of the funds, while high street challenger bank TSB was thought by industry insiders to be one of the front-runners before a computer meltdown dented its reputation.
RBS has been forced to pay the money to remedy concerns over state aid after it was bailed out by the government during the financial crisis. It was required to sell off Williams and Glyn, a small business banking brand, but failed to do so.
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The aim of the fund is to boost competition for small business banking services, with the market currently highly concentrated with the big high street banks.
The biggest grant under the programme will be for £120m, for advanced business current account offerings, with other awards ranging from £100m to five £5m awards for fintech firms focused on the small business space.
Cromwell said: “This project combines resolving RBS’s state aid obligations with seeking to support greater competition in the SME banking market. I am looking forward to working on this with a range of stakeholders once BCR becomes operational.”
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