DELAYS to a reform which aims to boost banking competition are leaving firms out of pocket, it has been claimed.

As a result of the 2008 financial crisis, the Royal Bank of Scotland has been told to contribute £775 million to a fund designed to enable business customers to switch accounts to smaller banks.

The fund was part of the conditions for the £45 billion government bail-out of RBS and Westminster announced the application process for funding would begin earlier this year.

The announcement saw smaller banks such as TSB, Starling, Metro and CYBG rush to prepare bids for funding and take on new staff to cope with the extra customers – but no information has yet been released on how to apply for funding.

A scheme to encourage SMEs to switch from their RBS accounts was also supposed to begin earlier this year but has, as of yet, still to launch.

“It’s now almost 10 years since the financial crisis and since RBS took billions of pounds in bailout funding, and the subsequent consolidation in the banking marketplace,” said Anne Boden, chief executive and founder of digital bank Starling.

She warned: “We will see further consolidation unless something is done about it. We are still waiting for the RBS remedies fund to be distributed.”

Metro Bank executives say they have spent £590,000 so far to prepare their bid in the hope they can be awarded £120m to enable them to take a bigger share of the business market.

This is dwarfed by the £5m already spent by CYBG, according to its latest figures.

TSB, Starling and Santander – which is also expected to bid – have not yet disclosed their spending.

The new scheme is to be run by the independent Banking Competition Remedies (BCR) body. The funding package will include a £425m fund to be shared amongst the smaller banks to develop their services for business customers.

A separate £350m fund will be aimed at persuading SMEs who held accounts with RBS’s William & Glynn network to switch their accounts over to the challenger banks.

However, the top appointments at BCR were only announced in May and no external consultancy – required to assess the bids from the challenger banks – has been hired yet.

The new chief executive of BCR is Geoffrey Cromwell, while the executive director is Brendan Pellow.

Further appointments are understood to have been hindered by the difficulty of finding impartial candidates from the banking sector as they will oversee which challenger banks are selected to receive a share of the funds.

Economic Secretary to the Treasury, John Glen, said that he was “hopeful that in the early autumn we would get some initial steer on the process that will be taken forward”.

A spokesperson for HM Treasury, which devised the package but remains at arms’ length to the BCR, commented: “We appreciate that challenger banks are keen to see the package come into effect, and BCR has assured us that it will announce further details, including timelines for implementation, very shortly.”

BCR gave no comment but announced in May that it was to “launch the package in the summer of 2018 and will provide in the coming weeks further detail on timelines and information for potential applicants”.