Business Secretary Vince Cable today accused high street banks of "ripping off" their customers as it was disclosed some are charging up to 167% interest on unauthorised overdrafts.
Mr Cable also said customers were losing out because of a lack of competition in a marketplace dominated by a small number of big banks.
He was speaking after a survey for the BBC's Panorama programme revealed that the average interest charged on unauthorised overdrafts was as much as 167%.
The research also found banks were demanding an average 32% interest on authorised overdrafts, despite advertised rates of around 19%.
Mr Cable said: "When we talk about restructuring the banks what's going to come out of this is a more competitive system where the customers are not ripped off.
"One of the negative side effects of this crisis is that our banking system that was already very concentrated is now even more concentrated so there's less competition, less choice and bigger temptation for banks to earn margins at the expense of their customers."
Christine Ross, head of financial planning at SG Hambros which carried out the research on overdrafts, said consumers should read the fine print for hidden charges.
"What we found is that unless individuals really scrutinise the small print the overdraft rates charged are far higher than they could even imagine," she said.
Bank customers complained to Panorama about the Halifax, claiming it was charging an effective annual rate of interest of 3,650% on an overdraft of just £10.
It was reported that instead of charging advertised interest on overdrafts, the bank was charging a flat fee of £1 a day.
This means that customers with small overdrafts end up paying a disproportionately high rate of interest over the course of a year.
In a statement, the Halifax said customers said they "want a clear overdraft charging structure" and the £1 a day represents "a simply set of daily fees".
The bank said it offers a "buffer zone" for overdrafts of less than £10 that is free and that the vast majority of its customers do not go into overdraft.
Panorama: How to Beat the Banks will be shown tonight at 8.30pm on BBC One.Reuse content