Swiss cooperative Migros Bank has announced that it may start charging some retail customers for deposits if the Swiss National Bank (SNB) keeps pushing interest rates further into negative territory, according to Chief Executive, Harald Nedwed.
The news follows a recent announcement from Royal Bank of Scotland (RBS) and Natwest that they may start charging firms to hold deposits if interest rates are cut below zero.
In late July, a letter was sent to around 1.3 million business and commercial customers of the two banks warning that with global interest rates at “very low levels” the bank could be forced to start “charging interest on credit balances” depending on future market conditions, as reported by Finance Magnates.
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Nedwed said, “For now, there are no plans to pass on negative rates on savings account for private clients. But such a step is not excluded if the SNB’s negative rates last a long time”.
With 33 billion Swiss francs ($33.68 billion) in client funds, 67 branches and over 800,000 customers, Migros Bank is one of Switzerland’s largest retail banks focusing on traditional and e-banking services.
So far, nearly all Swiss banks have held back passing on negative rates to retail customers, but Nedwed said this may eventually change and banks are already thinking about such a move.