The CMA found that Clydesdale was in breach of rules that ban it from ‘bundling’ – when customers are forced to open a business current account with their loan provider.

The CMA said this practice restricts competition and limits choice as small businesses could then be stuck paying for a business current account that doesn’t meet their needs.

The watchdog’s action comes after it found that Clydesdale had not complied with certain aspects of these rules, and follows similar recent action against Lloyds Banking Group.

Clydesdale breached the undertakings by requiring customers who were running their business through a Clydesdale personal current account to also open a business current account with the bank in order to obtain a loan through the government’s Bounce Back Loan Scheme.

Bounce Back Loans were launched in May last year and enabled small businesses to apply for up to £50,000 from the government if they were struggling due to the coronavirus crisis.

The CMA is aware that the affected Clydesdale customers would not initially be charged for these business current accounts. However, small business customers may have kept these accounts open for longer than the initial fee-free period rather than opening a more suitable account with another provider.

In December, Clydesdale wrote to all affected customers to inform them that they were not required to retain the Clydesdale business current account for the whole duration of the Bounce Back Loan, and offered them the option of switching to a fee-free loan servicing account.

This comprised 55 of its own customers and 112 Yorkshire Bank customers. Clydesdale Bank plc, which owns the Yorkshire Bank brand, voluntarily contacted its affected customers.

Adam Land, CMA senior director of remedies business and financial analysis, said: “The Bounce Back Loans Scheme provides critical support to small businesses during the pandemic. We are acting to ensure that the large banks do not restrict the choices of small businesses by bundling loans and business current accounts. We are pleased that Clydesdale is now taking the steps necessary to become compliant.”