Eric Daniels, chief executive, Lloyds Banking Group highlighting the importance of Bank of Scotland, warned that the competition will not be affected by the breaking up banks.

Mr Daniels assured the Treasury committee that Lloyds has not offered the selling of Bank of Scotland during its last year negotiations with European competition officials.

Mr Daniels said, "The Bank of Scotland is a very powerful brand in Scotland. It is a 300-year-old name and identification with it is very strong."

An Independent Commission on Banking is keeping an eye on the competition and has the option for proposing the break-up of Llyods, which is having 30 percent of the UK mortgages and current accounts.

Chief executive of Royal Bank of Scotland, Stephen Hester assured that the bank can compete successfully in the market.

He said, "I do not see evidence that a high street you can walk down with 10 banks has particularly greater competition than one with five."

Helen Weir, executive director of retail for Lloyds's group revealed that a typical current account in credit has lost £35 a year in "interest foregone" which is the difference between the customer receivable amount and base rates of Bank of England.

Tesco Bank, new and small player trying to dominate the big banks argued that big banks capture and share the data on customers - must ensure proper lending.