Former Barclays executive Richard Davies is said to be setting up a new bank for small and medium-sized businesses (SMEs), according to Sky News on Monday.
Davies, who was head of the UK operations in Barclays' corporate bank before resigning in November, has established OakNorth.
OakNorth has secured backing from a group of prominent investors and is one of 20 fledgling banks which are pursuing licences from the Financial Conduct Authority (FCA).
Joining Davies in his endeavour will be a team which includes Chris Dailey, who was an executive at Aldermore, one of the new banks which have emerged in Britain following the financial crisis.
The news comes as the government tries to boost competition in the banking industry. Labour leader Ed Miliband has vowed to make the creation of new banks a central part of his economic policy.
The FCA said it would relax capital and liquidity rules for new entrants to the banking market, two of the biggest hurdles for gaining regulatory approval.
OakNorth said it intends to "focus on the entrepreneurial community in the UK - working with fast growing small and medium sized enterprises, property developers, high net worth individuals and venture capital firms," according to a website it has set up.
"OakNorth will offer a wide range of lending and saving products to assist SMEs and investors in financing their future growth. The business model will seek to augment traditional banking practices with digital / new form lending techniques."
It is understood Business Secretary Vince Cable held talks earlier this month with a group of so-called challenger banks to discuss the challenges they face.
Executives from Aldermore, Metro Bank, Shawbrook and TSB, along with Treasury ministers, regulators and the Chief Executive of Cable's new British Business Bank attended the meeting.
Cable told Sky News that new banks entering the market should be encouraged as they provide choice to customers and are an important source of finance for small businesses.
"Regulators have taken moves to improve the way they authorise new entrants, working closely with the banks and providing time for those that need to get staff and investment in place," he said.
"They have reported an increase in the number of potential new banks they are in talks with, which is promising.
"However, most applications under consideration are for niche banks and to have meaningful competition we need banks with the significant technological platform, the kind TSB and Williams and Glyn received from their parent banks [Lloyds Banking Group and Royal Bank of Scotland."