Metro Bank, Starling and ClearBank are the first round winners of the RBS £775m giveaway.
RBS is freeing up a pot worth £775m as part of the conditions dating back to its £45bn 2008 UK government bailout.
This is made up of £350m available to incentivise switching and another £425m to boost business banking deals.
Banking Competition Remedies (BCR) has been set up to oversee the RBS £775m giveaway.
The first grants awarded by BCR relate to what it terms the Capability and Innovation Fund.
BCR is awarding Metro Bank £120m, Starling £100m and ClearBank £60m.
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By GlobalDataGodfrey Cromwell BCR’s Chairman says: “These awards seek to increase competition in the business banking market. Following the successful launch of the Incentivised Switching Scheme by BCR last year, Pool A is the first group of grants from the Capability and Innovation Fund.
“Further grants (Pools B, C and D) will be awarded later this year.”
RBS £775m giveaway: switching rates lamentably low
BCR received a total of 16 applications from six applicants for the initial Pool A process.
There are around 6 million SMEs in the UK.
RBS NatWest currently has a SME market share for current accounts of around 22%.
Current account switch rates remain lamentably low. Less than 1% of SMEs switched their primary business current account last year.
Eight other challenger lender remain in the mix for subsequent BCR grants.
The firms include TSB, Clydesdale, Coop Bank, Nationwide, Handelsbanken, Monzo, Arbuthnot and Hampden & Co.
RBS £775m giveaway: Pool B worth £80m
The next pot to be dispensed by BCR is worth £80m and is split into a £50m and two times £15m grants. The pool aims to facilitate the modernisation of existing business current account offerings or the development of new business current accounts for SMEs in the UK.