Eight High Street banking groups have agreed to make changes to their small business banking services to improve competition in the market.
The moves come after a Competition Commission report found the market was not competitive and proposed remedies.
Chancellor Gordon Brown and Trade Secretary Patricia Hewitt accepted undertakings promised by the eight main clearing banks.
Mr Brown said: "Small and medium-sized firms should see increased competition between the banks for their business and as a consequence get a better deal from them."
The remedies cover a range of issues such as measures to ease switching and increased transparency of bank charges.
The banks concerned are Barclays Bank, Bank of Ireland, Bank of Scotland, AIB Group, HSBC, Lloyds TSB, National Australia Bank (through Clydesdale Bank and Northern Bank)
and the Royal Bank of Scotland Group.
The Director General of Fair Trading will seek further undertakings on switching account providers.
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