Three of the State's leading banks have reached an agreement with the Small Firms Association (SFA) on a series of initiatives designed to improve their service to small business. They have agreed to amend business account statements so that core interest charges and surcharges are shown separately. They have also agreed that when approvals for loans and other forms of finance are issued they will clearly specify the interest and charges which will apply.

The three banks have agreed to nominate a designated official based at head office who can be contacted directly by a business customer should a complaint or dispute not be resolved when first presented at a local branch.

In relation to bank fees, all three are to examine their existing fee structure, with a view to reducing the number of charges. The banks say all queries and complaints will be "properly and promptly addressed".

A spokeswoman for Bank of Ireland said its recent decision to abolish 21 personal current account charges is likely to be repeated for business customers.

Ulster Bank held discussions with the SFA, but has decided that "rather than join in a collective initiative with other banks, it is preferable from our customers point of view if we operate within our own procedures".

"Our preference on this issue is to develop our own arrangements, which are workable and which can be delivered in a reasonable timeframe rather than commit to industry-wide promises of a longer term nature," said the bank's head of small and medium enterprises, Mr John McGrane.

The initiatives arise from a series of meeting which took place between the SFA and the banks after revelations concerning National Irish Bank.

According to SFA assistant director, Mr Pat Delaney, the package includes separate details of core interest, penalty interest and surcharges was an important concession.