Danske Bank A/S, Denmark’s largest financial institution, announced on Friday that it will apply positive interest rates to certain retail customer accounts. The decision comes in response to increasing pressure from lawmakers and consumer groups, who have urged banks to adapt to the recent increase in interest rates by the Danish central bank, Nationalbanken.
Earlier on Thursday, Nationalbanken had raised its benchmark interest rate, mirroring a similar move by the European Central Bank. The shift is important for the Danish banking sector, which has struggled with negative interest rates since 2012, when the central bank became the first global bank to implement such a policy.
Despite the central bank having adjusted interest rates upwards ten times in the past fourteen months, many banks are reluctant to fully raise their deposit rates above zero. This reluctance has drawn criticism from several quarters and even prompted some lawmakers to propose a new tax on banks as a punitive measure.
In an effort to address this controversy, Danske Bank has stated that it will offer an annual positive interest rate of 0.25% on transaction accounts. In addition, it provides an interest of 2.5% on children’s savings accounts. The Copenhagen-based bank announced these changes in a statement released Friday.
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