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UniCredit clarifies it will only apply negative rates on deposits over €1M

UniCredit SpA will charge customers negative rates for holding their cash but only on accounts with more than €1 million in deposits, Reuters reported Oct. 14.

UniCredit CEO Jean Pierre Mustier had said in the week of Oct. 7 that the Italian lender would apply negative rates on deposits over €100,000 from 2020 to contend with the low-interest-rate environment, which quickly drew flak from unions and consumer groups, the report said.

Banks across Europe are making similar moves to grapple with the low-interest-rate environment which is expected to last longer than anticipated following the European Central Bank's rate cut in September.

German banks are expected to take the hardest hit from negative interest rates and banks in the country have started to charge a negative 0.5% rate on retail deposits, while some have reduced the deposit amounts that are free of charge.