Monday May 25, 2020

Small firms warned about overdrafts

Small businesses will face a 6per cent surcharge on unauthorised overdrafts, following the adopt ion of new international rules on capital allocation by banks, a leading banker has warned.

1st March, 2008

Small businesses will face a 6per cent surcharge on unauthorised overdrafts, following the adopt ion of new international rules on capital allocation by banks, a leading banker has warned.

John Kelly, of the Business Strategy Unit at AIB, said that the new Basel rules on capital adequacy require banks to allocate greater capital for accounts which are overdue.

Kelly said that banks no longer had the discretion to waive surcharges on unauthorised overdrafts.

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