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BCR consults on re-distribution of £100 million in business banking grants

BCR consults on re-distribution of £100 million in business banking grants

The UK's Banking Competition Remedies board is opening consultations on the best ways to redistribute the £100 million in grant cash returned to the RBS bail-out fund by Metro Bank and Nationwide.

Earlier this month, Nationwide halted plans to enter the business banking market and returned £50 million in RBS bail out money to the BCR. The building society's retreat followed an earlier announcement by Metro Bank to return £50 million after downgrading its plans for branch expansion over the coming years.

The money was initially handed out as part of an effort to stimulate competition in the market for business banking services.

The returned cash has now been allocated into a new fund, dubbed Pool E. BCR has opened consultations on the optimal individual grant sizes within the £100m before finalising its decisions on these and then opening for Pool E applications.

It is envisaged that the funds will be provided as grants to eligible bodies in two rounds: one of £20m focused on Pool D bodies, the other of £80m focused on Pools A, B and C bodies.

For the £20m application round, BCR is considering making grants available from £2.5m to £5m. For the £80m prize pot, BCR is contemplating hand outs in multiples of £5m and a maximum grant size of £20m.

BCR Chair, Godfrey Cromwell, says: “The Capability and Innovation Fund now has the opportunity to redeploy £100m to potential applicants who can deliver choice and effective solutions to SMEs. This is particularly important in the current economic climate and BCR has sought to bring forward this funding with that in mind.”

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