Treasury Select Committee chair calls out UK banks for treatment of SMEs during Covid crisis
The UK’s biggest banking groups have been served a ‘please explain’ letter regarding their treatment of small business clients throughout the Covid-19 pandemic.
Mel Stride, chair of the Treasury Select Committee, has asked Lloyds, Metro Bank, Santander, NatWest, HSBC and Barclays to explain their current policies on business accounts.
Stride said the influential committee has heard reports, both from constituents and in the media, that small and medium-sized enterprises (SMEs) have faced difficulties opening new business current accounts.
The Tory MP asked the banks to explain if they have changed their criteria for opening new accounts since March last year when the Covid-19 lockdowns first started.
He also asked bank bosses to say if customers or potential customers are facing longer wait times, how they can complain, and if the banks had been receiving more complaints than usual.
Last year, City A.M reported on the trials of some of the capital’s small and micro-businesses trying to access Government support programmes and being delayed or denied them due to issues in opening the necessary bank accounts.
Subsequently several UK banks were called out by the Competition and Markets Authority because they required struggling businesses to open a current account in order to access Government-backed Covid loans.
Potential withdrawal?
In his letters to teh six respective banking groups Stride also asked banks if they were weighing up a potential withdrawal from the SME market.
“As the recovery from the pandemic gets under way, many SMEs will continue to need vital support from financial institutions,” Mr Stride said in a statement.
“It’s critical that these institutions are adapting to the requirements of SMEs as the economy starts to pick up.
“The committee wants to know more about the state of the business current account market, and whether action needs to be taken to mitigate the difficulties faced by SMEs.”
The banks have one month to respond to the panel of MPs.