LONDON (Reuters) - Banks challenging Britain's established lenders say proposals by the country's anti-trust watchdog do not go far enough to boost competition in retail banking.
Virgin Money (LON:VM) Chief Executive Officer Jayne-Anne Gadhia said on Wednesday they were a "missed opportunity" for customers.
More than 40 banks, financial services firms and consumer groups responded to the Competition and Markets Authority's (CMA) provisional decision on so-called remedies aimed at boosting competition.
The CMA has been consulting on possible remedies to promote competition since October last year. These include making it easier for customers to compare products and review services.
Gadhia said the proposals will fail to clear up confusion about how much a "free" current account actually costs, where customers unknowingly suffer from lower interest rates paid on their deposits as well as higher overdraft fees.
And customers will still be discouraged from switching to rivals because they will not be allowed to take their account numbers with them, she said.
Some lenders warned the proposed measures could in fact stifle competition rather than encourage it.
"The proposed implementation approach for some remedies could make the market less accessible for new entrants," the Co-operative Bank
When it launched the review, the CMA said banks had not done enough to meet the needs of retail customers or small and medium-sized businesses.
Larger lenders including Lloyds Banking Group (L:LLOY) and Barclays (L:BARC) were more supportive of the proposed measures in their responses, but set out some detailed concerns, with the latter calling for more time to implement many of the changes.
The CMA has the power to order banks to sell assets or to provide greater clarity on pricing.