Home Social New, ethical not-for-profit bank opens in Edinburgh
The accent is firmly on ‘ethical banking’ as new bank, created by the merger of two long established credit unions, breathes fresh competition into local banking with attractive savings and borrowing rates
A new community bank designed to put people before profit has launched in Edinburgh today (Thursday, 20 October), coinciding with International Credit Union Day.
Castle Community Bank, which has been formed following the merger of two long-established credit unions which served the Craigmillar and north Edinburgh communities, is set to provide financial products similar to those of High Street financial institutions, but with the emphasis firmly on sustainable banking.
The ethical bank, which is based in the north of the city, says it will offer savings and loans to all residents who fall within the EH postcode catchment area.
It’s a not-for-profit enterprise, whose surplus funds will be “ploughed back into communities around Edinburgh.”
The new bank, which has no shareholders and is fully owned by its members, says that while financial cooperatives have traditionally been designed to provide help and support to individuals and families who may be precluded from traditional banking facilities, it’s already attracting interest from young professionals and others who want to put their finances in the hands of an ethical financial institution free from the shackles of shareholder dividends, ‘fat cat’ bonuses and significant banking costs.
Reverend Iain May, Minister of South Leith Parish Church in Edinburgh and a former banker, marketing manager with RBS and the head of planning and strategy for Allied Irish Bank Group, helped set up the new bank.
He said: “Whilst we are different in structure to a traditional High Street bank, we adhere to the same robust regulatory requirements and independent scrutiny aimed at protecting our customer’s interests. Castle Community Bank has taken well over a year to launch, because of the systems we had to adopt.
“Our core principle is to ensure that the vulnerable in our communities do not have to get caught up in a debt spiral or turn to payday lenders to make ends meet.
“Equally, our market research indicated that people across the City would welcome a bank with a strong ethical policy, one that took corporate social responsibility to its heart within every facet of its operation and, importantly, ensures that 100% of all profits were re-invested into the community at all times. On that basis, Castle Community Bank is a bank for all.”
The bank currently has a growing customer base, running well into four figures and a healthy deposit of customer savings, known as “member shares”, as well as an active Loan Book. It’s Capital Access Ratio is a very strong 17% – whereas 3% is the regulatory minimum requirement. Castle Community Bank currently offers competitive interest rates on fixed term deposits as well as free life cover on personal loans and savings accounts.
Moreover, all savings are protected by the Financial Services Compensation Scheme (FSCS) – up to £75,000 (Castle’s maximum deposit is £15,000) and of course it is regulated heavily by the FCA and PRA – similar to banks).
Rev. May added: “People want a community lender based in their community. I am absolutely certain that as we grow and the word spreads and people see the very competitive interest rates we offer, many will make the decision that some or all of their money should be in our community bank, rather than a large multinational which may be based in Frankfurt, London or Shanghai.
“It will make sense to a lot of people that investment in their own community bank gives something back to the very people they live amongst.”
Castle Community Bank has been working in partnership across Edinburgh and The Lothians with a wide range of public and private sector organisations and associations, social enterprises, schools and religious organisations.
It currently has two ‘walk in’ branches in Niddrie and Wardieburn and has invested significantly in one of the most dynamically robust and secure online web presences offering 24/7 online banking.
About International Credit Union (ICU) Day
ICU Day has been celebrated on the third Thursday of October since 1948. The day is recognised to reflect upon the credit union movement’s history and to promote its achievements.
More than 57,000 credit unions operate in 105 countries worldwide, providing community-based financial services. Credit unions empower people to access high quality and affordable financial services and help 217 million members — many of them reliant on low income and/or financially excluded — to create opportunities such as starting small businesses, building family homes and educating their children.