annual report
press release
political objectives



Nearly 1000 urban and rural communities in Britain offer no convenient choice of bank to those small businesses which are cash and cheque dependent – according to Federation of Small Businesses research nearly 60% of businesses visit a branch at least weekly; 10% do so every day.  The number of communities so disadvantaged is set to increase as banks close neighbourhood branches in favour of investing in the ‘retail experience’ in high footfall multiple choice town and city centre sites.

In many other countries the competition authorities do not allow this absence of local market competition to develop.  In the UK, government and the relevant authorities are culpable in their neglect which is graphically illustrated by the chronology below with regard to the failure to improve the awareness, operation and take-up of the little known IBAAs, the inter bank agency agreements which facilitate use of a local bank’s counter by small business customers of other banks, thus preserving competitive choice and helping to sustain those remaining branches and the communities they serve.

March 2000 

Following Cruickshank’s criticisms of banking competition, the Competition Commission was required to conduct an inquiry into small business banking.

14 March 2002

Government accepted the Commission’s contentious conclusion that the banking market is national but required the main banks to investigate use of existing branches on ‘fair, reasonable and non-discriminatory terms’ by customers of banks without a local presence and to report findings in 1 year.


14 March 2003

The required ‘Branch Access Feasibility’ report by the banks to the OFT rejected the case for a national scheme of branch access, claiming the need can be met by improvements to awareness and operation of existing inter bank agency agreements (IBAAs).  The logic of the report was deeply flawed statistically, understating the number of ‘no choice’ locations by a factor of 4 and the demand by a factor of at least 10 based on the banks’ own experience.  


June 2003

Assessment of the above report by independent consultants to the OFT identified key omissions and suggested material improvements to the operation of the service, and its awareness level, and inclusion within a voluntary Code.  


September 2003

OFT accepted delivery of the banks’ report within the timescale (although statistically flawed, incomplete in coverage and minimalist in commitment to improvements) as compliant; passed to HM Treasury without comment.


November 2004

Independent reviewer of the Business Banking Code, Professor Elaine Kempson, recommended inclusion of an obligation to advise all business customers of IBAAs and how to apply to use them. The banks chose to ignore the recommendation without giving reasons.


January 2006

OFT commenced 3 year review of the banks’ undertakings to the Commission.
August 2007

Publication of OFT advice given to the Commission discloses still only 25% awareness of IBAAs from which ‘many non-aware customers might gain’. Hardly surprising as even the modest March 2003 commitments not honoured.


November 2007

New independent reviewer of the Business Banking Code, Mike Young, recommended inclusion of an obligation to outline IBAAs to relevant small business customers at account opening stage.  The banks rejected the recommendation citing reasons irrelevant to its substance and intent.


21 December 2007

Competition Commission declined to take further action with regard to IBAAs following its review, re-stating its decision not to recognise a local market for banking competition and again claiming that delivery of the 14 March 2003 (flawed) report by the banks had fulfilled their undertaking.

2 April 2011

Treasury Committee recommended the Independent Commission on Banking to consider an improved Inter Bank Agency Agreement (and neutral shared branches) in its remit to promote competition in banking. The ICB failed to address the shortcomings of IBAAs and made no recommendations in this area in its final report.
CCBS   Feb. 2008 (Updated Sept. 2011)