Royal Bank of Scotland and its subsidiary Natwest have agreed to increase loans to businesses under the government's Working Capital Scheme .
In a statement, Business Minister Ian Pearson said: " RBS and Natwest have agreed that the capital released by their participation in the scheme will be redeployed in support of lending to creditworthy small and medium-sized enterprises and mid-corporates."
"This forms part of the £16 billion of additional lending to businesses they committed to on February 26."
The spokesman refused to reveal how much the agreement covered, but Prime Minister Gordon Brown told parliament on Wednesday that £1 billion had been agreed under the government measure.
Mr Pearson added that the government was also in advanced talks with two other unnamed banks to participate in the scheme .
The Working Capital Scheme is the centrepiece of the government's initiative to help boost bank lending to struggling small and medium-sized businesses (firms with turnover of up to £500 million) across the UK.




