Banks and building societies will be spared an investigation by the Competition Commission into their provision of current accounts.
The Office of Fair Trading has been investigating whether banks are deliberately obstructing consumers from switching their bank accounts.
It concluded that despite major concerns, it would not refer the case at this time and would inspect the market again in two years’ time.
The market is concentrated around four banks – HSBC, Barclays, RBS and Lloyds – which controls three-quarters of the market.
Both RBS and Lloyds are required to sell off branches and, by extension, a proportion of their customers, by the European Commission, as a condition of the state bailouts they received during the height of the financial crisis.
Both have encountered difficulties, however, with the Co-operative Bank recently withdrawing from a deal to buy 600 branches from Lloyds Banking Group (read more).
New entrants to the market have also failed to make major inroads into the market.
Affable challenger Metro Bank, the first retail bank to join the high street in over a century, continues to grow at a slow and steady pace, while the long-anticipated initiation of current accounts at Tesco has been delayed by numerous technical difficulties.
The Post Office has recently begun a trial of its three new current accounts in East Anglia, with a view to rolling the products out nationwide in 2014.
With a branch network that dwarves all existing high street banks combined, the products could become popular with customers in rural areas and local communities (read more).
The European Commission hopes to make it easier for consumers to switch current accounts through a directive that reduces the time for banks to switch current accounts from 30 to 15 days.
Banks in the UK have already agreed to stricter conditions, and will cut the time required to switch accounts to just seven days starting later this year. (See our guide on this here).
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