UK watchdog extends retail banking investigation
The UK's Competition and Markets Authority (CMA) has extended the deadline for its investigation into retail and small business banking sectors.
The investigation, which was scheduled to end in May, has now been extended to 12 August.
Lloyds Banking Group, Royal Bank of Scotland Group, Barclays and HSBC dominate the UK retail and business banking.
In 2014, the banks held nearly 70% of personal current accounts and 80% of business accounts in the UK.
The watchdog believes that the UK retail banking sector is not competitive enough and the extension will offer additional time to consider industry's responses to its proposals on existing account overdrafts.
The CMA said: "In taking this decision, the inquiry group has had regard to the scope and complexity of the investigation, the extent of the possible remedies package that is being contemplated, and parties' responses to the inquiry group's provisional findings and notice of possible remedies."
The authority proposes to take measures to help customers in better understanding and managing their use of overdrafts.
Banks are also being urged to provide grace periods during which customers can take measures to prevent unarranged overdraft charges.
Last month, a report by the UK's Payment Systems Regulator urged banks to divest their stakes in payments infrastructure as part of a fundamental change to increase competition.
Payment systems are currently owned by a small number of banks, which also own the VocaLink system that is used to process 90% of UK salary payments.
The regulator's review identified that the dominance of Vocalink and the small number of banks that own it has a negative affect on innovation and competition in the industry.
Image: The Competition and Markets Authority proposes to take measures to help customers in better understanding and managing their use of overdrafts. Photo: courtesy of Naypong/FreeDigitalPhotos.net.