Banks review standards ahead of public hearing

The UK's four biggest banks, which are being investigated by the Competition Commission over accusations that they are operating a cartel in the small business banking market, are drawing up plans to improve standards ahead of a public hearing next month.

The UK's four biggest banks, which are being investigated by the Competition Commission over accusations that they are operating a cartel in the small business banking market, are drawing up plans to improve standards ahead of a public hearing next month.

NatWest, Royal Bank of Scotland, Barclays and Lloyds TSB are to send senior staff to the Commission's public hearing on 3 November. Among the concessions the banks are expected to make are improving the system for transferring a customer to a new provider and making charges clearer. One banker who will attend the meeting said: "Everything will be under consideration. We realise the situation is not perfect."

The Commission's investigation follows findings by Don Cruickshank, who investigated the banking sector for the Government, that small businesses are badly served by banks. The Cruickshank report highlighted high rates on loans and heavy fees for processing credit cards.

The banks are planning to co-operate with the Commission in an attempt to avoid a public relations disaster. One said: "We don't have to attend the hearing but I think everyone will. We don't want to make the same mistake as car-makers when they didn't turn up for the Commission's hearing."

The Federation of Small Businesses claims banks are charging retailers £300m to cover credit and debit card fraud but are only losing £75m from actual crimes.