There is nothing to stop high street banks letting their business branch managers make local lending decisions, the Financial Services Authority has said.

The clarification of the rules by the City regulator has prompted business groups to question why none of the main business banks are planning to do so as part of their efforts to attract more small business customers ahead of a government commissioned review that is likely to call for more competition.

Last year Santander told The Telegraph it would like to differentiate its business banking service from rivals like Royal Bank of Scotland, HSBC and Barclays by giving more lending discretion to branch managers. But Steve Pateman, head of corporate, said the FSA found it “unsatisfactory” if he let the “guy down in Barnstaple make the [lending] decision”.

“What the FSA is interested in is consistency of decision making and consistency of approach. It’s quite hard to deliver that level of consistency across 1,000 relationship managers. They are.....

Read more on this story: Bank branch managers can make loans to firms in their area, says City watchdog - Telegraph