The UK's biggest banks have agreed to release information from next year revealing how much they lend in specific localities, the Treasury has said.
This move will allow the government to see how banks are serving the wider economy and the areas of the country where lending is lacking.
According to the Treasury, seven of the largest lenders, which account for around 80 per cent of all loans, will publish how much they lend to businesses and individuals in 10,000 locations from January 2014.
The Royal Bank of Scotland, Lloyds Banking Group, HSBC, Barclays, Santander UK, Nationwide and Yorkshire and Clydesdale Banks will provide the information, which will be published by the British Bankers Association and the Council of Mortgage Lenders on a quarterly basis.
Chief secretary to the Treasury Danny Alexander said the move "is a major step forward in terms of transparency and should encourage competition by helping smaller lenders to identify gaps in the market".
By Tony Aynsley