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OFT sends Government further report on banks

17 September 2002

The OFT has sent a further progress report to HM Treasury and the Department for Business, Enterprise and Regulatory Reform on its discussions with clearing banks.

In March this year the Government published the Competition Commission's report on banking services to small and medium sized enterprises and asked the OFT to obtain undertakings from the banks to implement the remedies set out in the report and report back on the behavioural ones in six months. The behavioural remedies aim to improve conditions for competition and customer choice.

As reported to ministers in June, the eight main clearing banks [see Note 2] have agreed in principle to the behavioural undertakings requested. The OFT's report sets out progress in securing the behavioural undertakings from these banks.

The four largest clearing banks [see Note 3] have already agreed to offer any SME customer operating a current account in England and Wales one of the following:

• an account that pays interest of at least the Bank of England base rate minus 2.5 per cent, or
• a current account free of money transmission charges, or
• a choice between the two.

NOTES

1. More information on SME banking review.

2. 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.

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

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