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SME banking controls `to be lifted`
24 August 2007
Price controls on the four main business banks in England and Wales are to be provisionally lifted, the Competition Commission announced yesterday.
Following a review of the market by the Office of Far Trading (OFT), the decision to lift controls is aimed at boosting competition in the banking sector for small and medium-sized enterprises (SMEs).
Charges brought in five years ago required the four main banks in England & Wales to offer all SME customers either interest on credit balances at a specified rate or free core money transmission services. A final decision on controls over Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland, will take place next month.
John Fingleton, OFT chief executive, said: "This is an important step in the development of further competition in the business banking sector.
"It will allow banks greater freedom to innovate and compete for customers and will be most beneficial for those prepared to consider switching their banking service provider."
Last month, the Financial Services Authority reported that it was considering waiving all unauthorised overdraft charges against SMEs and consumers.
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