Santander, owner of high street bank Abbey, has introduced a fee-free bank account, a move that will surely boost competition.

The bank has scrapped overdraft charges and will not charge punitive fee for bounced cheques.

The announcement is good news for consumers, who face charges up to 35 pounds are for overdraw their accounts.

Customers will be charged 12.9 per cent interest if they go overdrawn, but there will be no additional fees.

Speaking on the issue, António Horta-Osório, CEO of Santander UK, said, "We have become the most efficient bank in the UK and so can offer more value to our customers."

The Supreme Court will announce its decision on the bank charges case next week.