Bank Services

Defence written question – answered on 22nd January 2014.

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Photo of Chris Leslie Chris Leslie Shadow Chief Secretary to the Treasury

To ask the Secretary of State for Defence with what bank his Department's bank overdraft is held; and what fees and charges were payable on the core Department's bank overdraft in the last financial year.

Photo of Philip Hammond Philip Hammond The Secretary of State for Defence

In common with most other Departments of State the Ministry of Defence (MOD) obtains its banking services through the Government Banking Service (GBS).

Under the current contract this means that the Department's core bank accounts are held with Citi and the Royal Bank of Scotland Group (RBSG) which trades as RBS, NatWest and Ulster Bank.

These accounts are funded by the Treasury on a monthly basis in accordance with the Department's forecast cash requirement for the month.

No changes were incurred in the last financial year in connection with individual GBS accounts being overdrawn because the overall set of MOD GBS accounts were in credit.

Where GBS cannot meet the Department's requirements, e.g. local banking services abroad, the Department enters into commercial arrangements to satisfy the banking requirement. These accounts are predominantly funded from the Department's core accounts or are self funding through receipts. These non-GBS accounts are not routinely held in overdraft but on occasions they may move into overdraft for short periods if funding transfers are not made in time or unexpectedly high payments are made from the accounts. In financial year 2012-13 interest paid by the MOD on such overdraft balances amounted to £911.55. Associated charges, where incurred, are not separately identifiable.

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