The chair of the Treasury Committee has written to senior executives at six banks, including HSBC and Santander, to request an update on the state of business current accounts market following reports that small and medium-sized enterprises are facing difficulties opening new accounts.
“As the recovery from the pandemic gets underway, many SMEs will continue to need vital support from financial institutions,” said Mel Stride in a 20 April statement. The Treasury Committee is a group of influential MPs tasked with holding the City to account. “It’s critical that these institutions are adapting to the requirements of SMEs as the economy starts to pick up.”
In urban areas, where city centres have been deserted as workers continue to work from home, SMEs have been hit particularly hard; the City of London Corporation launched a £50m recovery fund for Covid-hit SMEs in the Square Mile.
Stride’s letters, sent on 19 April and made public on 20 April, directs at least five questions at the banks’ senior leaders, including whether the banks have changed their criteria for opening new business current accounts since March 2020 and if they have received more complaints than normal since the beginning of the pandemic.
The MP, who also wrote to NatWest Group, Barclays, Lloyds Banking Group and Metro Bank, asked if the banks are considering withdrawing from the SME market.
“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 Conservative MP added.
The group of MPs expect to receive responses by 19 May. NatWest Group, Barclays, HSBC, and Lloyds Banking Group were contacted for comment.
A Metro Bank spokesperson said: “To date, we’ve extended £1.5 billion of finance to 36,000 businesses via Government-backed lending schemes. We also understand the need to continue offering long term financial assistance through other means, as the country’s businesses recover in the months ahead.”
A Santander spokesperson said: “We’re reviewing the request from the Treasury Select Committee and will respond in due course.”
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