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OFT sends banks' undertakings to Government

28 October 2002

The OFT has sent undertakings agreed by the eight main clearing banks (see note 1) to HM Treasury and the Department for Business, Enterprise and Regulatory Reform.

In March this year the Government published the Competition Commission's report on banking services to small and medium sized enterprises (SMEs) and asked the OFT to obtain behavioural undertakings from the banks to implement the remedies set out in the report.

It is now for the Government to consider the undertakings and decide whether to accept them.

The undertakings set out remedies to improve conditions for competition and customer choice. They require that all eight main clearing banks make a number of changes to their practices in order to reduce barriers to entry, increase transparency, improve choice and ease switching of accounts. 

The four largest clearing banks (see note 2) have already agreed to offer any SME customer operating a current account in England and Wales a current account paying interest and/or an account free of money transmission charges. [More information on the Department for Business, Enterprise and Regulatory Reform website.]

NOTES

1. Barclays Bank, Bank of Ireland, Bank of Scotland, AIB Group (trading in Northern Ireland as First Trust), HSBC, Lloyds TSB, National Australia Bank (through its subsidiaries Clydesdale Bank and Northern Bank) and the Royal Bank of Scotland Group.

2. Barclays, HSBC, Lloyds TSB and the Royal Bank of Scotland Group

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