Around £400m is to come from dormant bank accounts, while the remaining £200m is to be provided by Barclays, Lloyds, HSBC and RBS.
The organisation can’t borrow against its assets, limiting its ability to lend to the voluntary sector; and warnings have been issued that the bank won’t be able to help all the charities with financial difficulties.
“It is important not to present the bank as a financial panacea for the charity sector. Loans must be repaid,” said John Low, chief executive of the Charities Aid Foundation.