Last week, RBS announced that it will pay around £500 million in bonuses to its staff this year. But with 1 million basic bank account holders restricted from withdrawing cash, isn’t it time to review these payouts?
The state owns 84% of RBS. The same RBS whose profits just plunged – and the same RBS that wants to deny basic bank account holders from using rivals’ cash machines. To me, this just doesn’t add up.
Bankers bonuses never fail to get into the headlines. They are always a controversial issue that polarise opinion and provoke debate. I am not here to judge the rights and wrongs of bankers receiving bonuses, but to come at it from a slightly different angle.
Decisions through a different lens
I would argue that a bank that’s almost wholly owned by the taxpayer has an extra responsibility to act fairly towards its customers.
The simple truth is that RBS wouldn’t be in business were it not for the large bailout it received from the government. In my mind this means that the bank has to make commercial and business decisions through a slightly different lens.
Obviously the bank still has to be a viable commercial entity and make sound business decisions. However, the majority state ownership of RBS means that the decisions it makes will be judged to a different standard.
RBS can’t pick and choose
Let’s take a look at the recent decision by RBS to stop users of basic bank accounts using non-RBS cash machines as an example.
As we discussed recently, basic bank accounts are typically taken out by less well-off consumers – those who can least afford to pay to withdraw cash. Once banks start to pick and choose who can be a part of the bank system the benefits of universality start to break down.
When you then consider that this decision is being made at exactly the same time that the bank is paying out hundreds of millions of pounds in bonuses, the decision is even more maddening.
RBS say that they are running basic accounts at a loss as they pay a charge every time someone checks their balance or makes a transaction at an ATM run by another company. However, they are still able to afford to pay huge bonuses to staff that have contributed to falling profits. I don’t think that’s fair. Do you?