CMA letter to Danske Bank on a breach of the SME Banking Undertakings
Letter to Danske Bank for a breach of the Small and medium sized enterprises (SME) Banking Undertakings 2002.
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The CMA has subsequently sent a second letter to Danske Bank, following a further breach of the SME Banking Undertakings
Danske Bank (a trading name of Northern Bank Limited) breached the Small and Medium-sized Enterprises Banking Undertakings. Danske Bank required 305 of its SME customers (which were operating their business finances through a personal current account with Danske Bank) to open a Business Current Account (BCA) in order to progress their application for a loan under the Bounce Back Loan Scheme (the Scheme). Danske Bank started offering the loans under the Scheme on 4 May 2020.
The Action Plan on this page sets out information on Danske Bank’s actions to address its breach.
In summary:
- Danske Bank wrote to the 305 affected SME customers to apologise for requiring them to open a business current account as part of the Bounce Back Loan application process and to offer a choice to switch to a fee-free loan servicing account
- Danske Bank has offered impacted customers a 60 days fee-free period from the date of the apology letter
- Danske Bank confirmed it has refunded all business current account charges and transactional fees incurred by the 305 impacted customers from the date of opening their business current account (plus 8% interest as compensation)
- Danske Bank will offer eligible SME customers who apply for loans under the scheme a choice between a fee-free loan servicing account or a business current account
- Danske Bank will inform SME customers that they are not required to maintain a Danske Bank business current account in order to retain a Bounce Back Loan with it
- Danske Bank has updated its website with key customer messaging on the changes.
The 8 banks currently subject to the bundling prohibition are AIB Group (UK) plc; Bank of Ireland; Barclays Bank plc; Clydesdale Bank plc, HSBC Bank plc, Lloyds Banking Group, Northern Bank Limited (trading name as Danske Bank) and NatWest Group plc (formerly the Royal Bank of Scotland Group which includes Ulster Bank Limited in Northern Ireland).