RBS, Lloyds & Northern Rock create new mini-banks; what’ll it mean for customers?

The government has announced it is planning to spin off sections of the megabanks created during the deep debt rescue needed in the midst of the financial crisis.

We hear that Williams & Glynn, a mainly North West-based bank that NatWest took over decades ago will be resurrected by RBS, TSB and others are likely to be demerged from Lloyds, and the good bits of Northern Rock will be sold or floated.

Ok so all this sounds great, but what I’m not yet clear on is what it means for customers?

Will my grandmother who used to bank with Williams and Glynn for example be moved back there automatically, or will she stay with NatWest/RBS? If she is moved and its products are better or worse than her current bank will she be given a choice?

What about someone with multiple products who perhaps had a TSB bank account but a Lloyds mortgage – will they both be moved – or will they be separated?

While it’s all very well to hear about these new banks, someone seems to have forgotten to mention what’ll happen to customers.

So let’s put our thinking caps on now. The only fair way to do this for me seems to be to offer EVERY customer of the banks the chance to move with NO CREDIT CHECK to whichever of the products they want. Yet the bureaucracy this causes will be huge.

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