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<p>The Government welcomes the efforts to establish regional mutual banks and recognises
the importance of diversity in the banking system. Officials have been engaging with
prospective mutual banks over their efforts to raise capital and look forward to further
discussions.</p><p> </p><p>Banking Competition Remedies Ltd (BCR) was established
in 2018 as the independent body to implement and oversee the NatWest (previously RBS)-funded
Alternative Remedies Package (the Package), including the £425m Capability and Innovation
Fund (CIF). This consists of 23 pre-determined grants divided into five pools (A –
E). Each pool has a distinct pro-competition purpose based on criteria agreed between
HM Treasury (HMT) and the European Commission.</p><p> </p><p>Eligible financial services
providers competed for these grants to improve their financial products and services
available to SMEs, and to improve their capability to compete with NatWest in the
provision of banking services to SMEs. Most of the grants have now been allocated,
except £5m worth of funds returned to BCR in January 2021. BCR intend to run a ‘Pool
F’ consultation process for the returned funds in August 2021 and bodies eligible
for pools A, B or C will be able to apply.</p><p> </p><p>BCR is independent from government
and has sole responsibility for evaluating applications and allocating grants to eligible
bodies under the CIF. HMT plays no role in the ongoing delivery of the Package and
does not have any influence over the decision-making process.</p><p> </p><p>BCR has
responsibility for communicating information regarding the Package to the market.
Further information on the Package, including eligibility criteria and timelines for
implementation is available on BCR’s website.</p><p><strong> </strong></p><p>The distribution
of dormant accounts money is governed by the Dormant Bank and Building Society Accounts
Act 2008. Following the government's commitment to expanding the Dormant Assets Scheme,
the Dormant Assets Bill was introduced to the House of Lords on Wednesday 12 May.</p><p>
</p><p>The government recognises the public interest in how this funding is spent
in England and has concluded that some increased flexibility in determining this would
be beneficial. The Bill therefore amends the approach to restrictions in England in
the 2008 Act to mirror the model used for the devolved administrations. This is intended
to allow the Government to respond to public feedback and evolving social and environmental
needs in England over time by setting the causes through secondary legislation, which
is subject to due consultation and parliamentary approval. Should the measure pass,
the Government intends to launch a public consultation on the causes to which future
funding can be distributed in England.</p>
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