The Santander bank has said the smaller business organizations are being denied for loans for high street banks because the rules of the Financial Services Authorities (FSA) are too rigid. The Spanish bank Santander will acquire 8% of the total business lending market of UK after taking control of 318 branches of Royal Bank of Scotland in next year.
The bank has cleared that it would not allow its bank managers to lend money to the small business companies because of the rules and regulations of FSA.
The bank has announced this at its head office with the City regulator. On the other hand, the government of UK wants the bank to lend more to small business firms in order to give them support in the critical economic period.
A senior MP of Treasury department Michael Fallon has taken this issue seriously and called for a thorough investigation. The head of UK corporate and commercial banking of Santander, Steve Pateman met with the MPs to discuss on the rules of FSA. All the high street banks including RBS, Lloyds, HSBC and Barclays are in support of Santander.