The Competition Commission (CC) has agreed to lift nearly all of the price control obligations placed on Barclays, HSBC, Lloyds TSB and the RBS group in relation to their SME banking services. However, the behavioural commitments that those banks (plus a number of others) were obliged to give in 2002 continue to apply and will be monitored by the OFT in conjunction with its numerous other investigations into the sector.
Following its own investigation, the Office of Fair Trading (OFT) recommended that the CC lift the 'transitional' price control obligations that had required the four banks to offer current accounts to SMEs which paid interest at 2.5% below the base rate or alternatively, did not levy charges for core money transmission services. Despite submissions from the Federation of Small Businesses, the British Retail Consortium and the Campaign for Community Banking that these transitional 'price controls' had not yet had the effect of sufficiently opening up the SME banking market, the CC has agreed with the OFT's recommendation to lift the price control. The four banks will, however, still be required to notify the OFT of any changes to, or new tariffs on, such accounts.
The 'behavioural' commitments that will continue to apply were imposed in 2002 on a wider group of nine banks. These commitments restricted the respective banks' ability to bundle products, required them to provide certain charging information and support the switching of customers. The OFT has agreed to work with the banks to publicise the existence of those requirements and it can be expected that it will do so in the context of its ongoing work with the financial services industry, including the interchange cases, the CC's PPI inquiry and, of course, the test case on the 'fairness' of customer charges.