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NatWest and RBS breaking new overdraft rules

RBS and NatWest are still including overdrafts when telling customers their 'available balance', despite new rules from the regulator banning this, can reveal.

As of yesterday (Wednesday 18 December), banks have been banned from including agreed overdrafts when telling customers how much they have available to spend. 

The changes, brought in by the Financial Conduct Authority (FCA), are designed to protect consumers by making it clear that overdrafts are a form of debt, rather than their own money. It is hoped the new rules will also help to prevent customers from dipping into their overdraft by mistake.

Yet RBS and NatWest have missed this deadline and are continuing to include agreed overdraft facilities in customers' available balances.

The RBS Group, which includes both banks, told us it's working with the regulator to become compliant as quickly as possible – though it's not been able to provide an exact date. 

The new rules, announced in December 2018, are part of an upcoming wide-ranging shake-up of overdrafts. From 6 April, banks and building societies will be stopped from charging higher prices for unarranged overdrafts, where you go over your overdraft limit, than for arranged overdrafts. Fixed daily or monthly fees for borrowing through an overdraft will also be banned.

For help in beating overdraft costs see our Cut Overdraft Costs guide. And if you're struggling with your overdraft, see Martin's blog: Are you an overdraft prisoner? How to escape it

How should balances be displayed under the new rules?

In a nutshell, your available balance should only show how much money you actually have in your account, and shouldn't include any overdraft facility you've agreed. The actual overdraft you have on your account ISN'T changing, so if you have an agreed overdraft you're still able to use it – but when you log into your bank account or use an ATM it shouldn't be counted as part of your available balance.

As an example:

If you have £100 in your account and you also have an arranged overdraft facility of £500, your 'available balance' should simply be displayed as £100 – excluding the overdraft from your available funds. 

And if you then went into your overdraft by £100, your balance should be displayed as -£100 to highlight that you owe the bank money – even though you can still spend another £400 if you need to before hitting your overdraft limit. 

How are RBS and NatWest breaking the rules?  

We've seen examples today (Thursday 19 December) of the NatWest and RBS apps and online banking including agreed overdrafts in customers' available balances, despite the ban. 

In the example pictured, the customer had £662.33 in his bank account and an overdraft facility of £500. 

Under the new rules, the available balance should simply be listed as £662.33, separate from the overdraft facility.

But instead the overdraft is included, to give an 'available balance' of £1,162.33.

We've asked RBS whether RBS and NatWest customers using their arranged overdrafts would be shown a negative balance (as required by the new FCA rules), and will update this story when we know more. 

A spokesperson from the FCA, which implemented the new rules, said: "We were informed in advance that some firms would fail to meet the new standards. We have been clear with them they need to come into line quickly and, in the meantime, we expect that they make right any consumer adversely affected."

'It's baffling that NatWest and RBS can't make a small change' 

Helen Saxon, banking editor at, said: "It's baffling in this day and age, when many banks and credit card providers can give you instant notifications of transactions, that NatWest and RBS can't make a small change to how balances are displayed, even after a year's notice.

"The change to how the balance is displayed has been brought in as part of an overhaul by the regulator of how overdrafts work, and this is an important step to making current account customers more aware that an overdraft is a debt, and an expensive one at that."

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