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CMA Criticises Banks for Failing SMEs

CMAAhead of the Competition and Markets Authority investigation into the energy market, the CMA has concluded that another critical market for SME businesses has failed them.

The CMA has ruled that HSBC, Barclays and RBS had breached or whose lack of awareness led to a potential breach of undertakings.

HSBC were found to have breached an undertaking not to force businesses to open a current account with them when they offered them a loan.

In addition the CMA censured Barclays and RBS for their “relatively low awareness among relevant staff of this prohibition”.

Alex Chisholm, chief executive of the CMA, said:

“Breach of these undertakings is a serious matter and we have directed HSBC on the actions they must take to correct the situation immediately — so that it is clear to both their staff and their SME customers that obtaining a business loan is not dependent upon opening an account.”

Ultimately the regulator can fine banks for such breaches however in this instance they have decided no to because each bank had promised to remedy their shortcomings.

The CMA has however cautioned that business customers should remain vigilant as to such demands and to report any concerns they might have about their bank failing to honour the agreement.