‘A PR man for the banks’? Banking resolution service faces pressure from MPs
A banking dispute resolution service has come under heavy scrutiny from MPs, who today questioned whether the organisation has been captured by the banks.
Mark Grimshaw, chief executive of the Business Banking Resolution Service (BBRS), was challenged by politicians in parliament today over the organisation’s success in dealing with disputes between small businesses and banks.
Since going live in 2021, over 1,000 cases have been registered with the organisation but only 137 cases have been resolved. When it was launched, it was thought the BBRS, which is entirely funded by seven participating banks, could resolve as many as 6,000 cases in three years.
“That record does not sound good to any outsider,” John Baron, a Conservative MP, said.
When asked why the BBRS had not been able to resolve more cases, Grimshaw pointed to the organisation’s tight eligibility criteria, which governs which cases it can take on.
“It’s the eligibility constraints that makes life difficult for us,” Grimshaw said.
Drew Hendry, a Scottish National Party MP, asked him whether the criteria was set up “deliberately to be too narrow”.
Grimshaw denied this, adding that the eligibility criteria was agreed unanimously by SME representatives and participating banks when the scheme went live. Changes to the criteria would also require the unanimous agreement of both the banks and the SME representative group, he explained.
Citing research conducted by Public First, Grimshaw also pointed out that 86 per cent of eligible SMEs were either satisfied or very satisfied with their banking partners.
“If I hadn’t known which organisation you were giving evidence from, I would have thought you sounded like a PR man for the banks,” Labour MP Dame Angela Eagle said.
Eagle suggested that the criteria should be widened to capture more cases. “You’re quoting the criteria you established as a reason why there’s fewer cases,” she said.
Danny Kruger, a Conservative MP, also asked why there had not been changes to the eligibility criteria. “Did the banks veto it?” he asked.
Again, Grimshaw denied this accusation. “I suspect there wasn’t unanimous agreement,” he said. “I’m not convinced in my own mind that the parties even got together to have that detailed discussion”.