HIGH street banks have been accused of creating a "complex monopoly" which may restrict competition in small business banking.

The Competition Commission pinpointed a number of possible barriers to the entry of smaller players, although the watchdog has yet to decide if these are against public interest.

Interim findings involve many more banks than just the sector's Big Four of HSBC, Lloyds TSB, Barclays and Royal Bank of Scotland, which owns NatWest.

Other banks named in the inquiry included Bank of Scotland, Bank of Ireland, The Co-operative Bank and Abbey National, which only has a small slice of the small and medium enterprise (SME) market. The commission will release a list of possible remedies later this month before issuing a final report in the summer.

It said it had uncovered a reluctance on the part of SME customers to switch between banks, with the majority getting all services from a same source.

There was also a lack of transparency towards SME customers concerning the different prices, availability and terms of products.

The preliminary findings in particular drew attention to the different pricing structures offered to SME customers.

The commission said it was concerned about the practice of offering free banking to start-ups and those thinking of switching accounts.

Other worries included the bundling of charges for gaining access to bank managers and the high charges for certain other services.