The Office of Fair Trading has proposed new guidelines for banks to improve their dealings with current account customers, but consumer groups again expressed disappointment over the measures.

"The OFT's response today is weak. It relies on banks improving themselves, when they have patently failed to do this in other areas in the past," said Adam Phillips, Chairman of the Financial Services Consumer Panel.

The new proposals come four months after the regulator suffered a bruising defeat at the Supreme Court on the issue of the fairness of bank overdraft charges after a two-year legal battle.

The OFT today claimed that some bank charges had fallen sharply it started its campaign and the measures today would build on that.

Over the next two years, the OFT wants providers to give customers an opt-out from unarranged overdraft facilities and the charges associated with them.

It also wants more choice around charging structures, the level of unarranged overdraft charges and also the treatment of customers who find themselves in financial difficulty. The OFT will also look at barriers to entry for new competitors in the market, it said.

The watchdog said it will report back in 2012 on the impact of these new initiatives and if there have not been significant changes it would consider further intervention, including recommending legislation.

"The OFT's spotlight on personal current accounts has triggered substantial changes, which are still under way. We believe that the commitments agreed by the industry today, along with changes by individual banks already made or expected in the next two years, should lead to a market that works better for consumers." John Fingleton, OFT Chief Executive, said.

Since 2007, the watchdog said unpaid item charges, levied when a bank refuses to make a payment have fallen from an average of around £34 in 2007 to around £17 in 2010, while charges when an unarranged overdraft is granted are down from an average of around £30 in 2007 to around £22 in 2010.

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