A £3bn funding gap has stopped the sale of RBS branches. The attempt to sell-off a network of 320 RBS branches has lost its way after the emergence of a £3 billion funding gap. The network was hugely dependent on the funding from the Bank of England. The RBS operations have been put on sale as per the orders of the European Commission.  

RBS received billions of pounds in form of state aid from the British government as well as 84% of the stake is owned by the British taxpayers.

This fact came under bidders’ attention when they come across the bidding document. The documents also indicated that the capital needed to support the previous loans could be two times more than the price they have expected. Hence the bidders have reduced their bidding price due to this huge funding issue and the capital problem.

Moreover it has stooped all anticipation of further banking competitions as now the big banks can only buy such businesses. Earlier the Government has produced an agenda to improve competition in banking by encouraging such sell-offs. But it seems to lose its way.