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EDITIONS
Thursday, 17 October, 2002, 05:34 GMT 06:34 UK
Charity bank opens for business
Chancellor Gordon Brown
Mr Brown is backing the project
Savers are being urged to shift some of their money from deposit accounts to a new Charity Bank.

The not-for-profit bank, which is backed by the Charities Aid Foundation, will provide cheap loans to charities which do not have access to mainstream lending facilities.

Officials believe that if even just a tiny fraction of the money held on deposit is transferred they will be able to raise 1bn to help charities.


I can't over emphasise the importance for all of us in both economic and social terms of bringing those on the outside into the mainstream

Sir Eddie George
The bank is being launched on Thursday by Chancellor Gordon Brown.

It has also won the support of High Street banks.

Depositors will have postal accounts, but no chequebooks.

They will receive a flat interest rate of 2% but will be able to waive it if they choose.

Good causes

A spokesman for Charity Bank said that research revealed a desire among savers to make better use of their money by investing in good causes.

He suggested that if just 0.25% of the money on deposits in the UK was shifted to the Charity Bank it could raise 1bn for good causes.

The bank will not be competing with commercial savings institutions.

Mr Brown is expected to be one of the first to open an account when he launches the bank at a reception at 11 Downing Street on Thursday.

The bank also has the backing of Bank of England governor Sir Edward George.

He described it as "an imaginative and novel approach" to ensuring charities had access to financial products.

"I can't over emphasise the importance for all of us in both economic and social terms of bringing those on the outside into the mainstream," he added.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Hugh Pym
"The new bank won't make profits"
Charity Bank chief executive Malcolm Hayday
"The money is pooled in a fund and then lent to community and charity needs around the country"
See also:

29 Jun 02 | Moneybox
01 May 02 | Business
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