The Competition and Markets Authority (CMA) has confirmed plans to delay the publication of its long-awaited review into the retail banking market, saying today that the results of the probe will not be published until the end of the summer.
In a statement this morning, the CMA put forward more recommendations to help customers understand and manage overdrafts, including and requiring banks to offer grace periods during which customers can take action to avoid unanticipated overdraft charges, requiring banks to give personal current accounts customers a choice on whether to have an unauthorised overdraft and measures to limit maximum unauthorised overdraft charges each month.
The CMA said it would collect responses "from all interested parties" to the recommendations before a deadline of 21 March.
The competition watchdog said that in order to "properly consider responses" the new deadline for publishing the full retail banking review would be 12 August – more than two years after the review was first launched.
The delay is likely to draw criticism from MPs and smaller financial institutions, who say more needs to be done to foster competition in the retail banking sector. Sky News reported over the weekend that MPs were "furious" at the anticipated delay and that CMA officials were likely to be brought before parliamentary committees to explain why the probe's publication date had been pushed back.
In preliminary results published last October, the CMA ruled out breaking up Britain’s biggest banks and defended so-called free banking practices.
But in its report in October, the CMA said it had provisionally rejected breaking up the big banks "as it was decided that they were not likely to be effective in addressing...competition concerns".
"The problems in the market are unlikely to be resolved by creating more, smaller banks; it is the underlying issue of lack of switching which has to be addressed."
The CMA also rejected calls to end “free banking”, saying it saw "no convincing evidence that the prevalence of the [free] model distorted competition", although it "noted that some banks have already devised accounts which compete with free-if-in-credit (FIIC) through the rewards they offer, and also noted that FIIC accounts give a reasonable deal to many customers".