Westminster inquiry hears of rural lending worries

Small businesses in rural parts of the Highlands and Islands have told an inquiry into banking standards of their concerns about borrowing.

Lib Dem MP John Thurso, who is leading the inquiry's work in Scotland, said the evidence could guide recommendations on banking reform.

The Westminster cross-party inquiry was set up after the Barclays Libor rate fixing revelations.

It met in Inverness on Monday to gather evidence from the north of Scotland.

Mr Thurso told BBC Scotland that the hearing heard complaints about banks' unwillingness to lend to small businesses and social housing projects in some parts of the Highlands and Islands.

The MP for Caithness, Sutherland and Easter Ross, said: "It was quite clear there is a strong feeling that there are difficulties faced in some of the more rural areas."

Three years ago, at a Treasury Committee hearing, Mr Thurso urged banks to return to old fashioned style banking as portrayed in BBC sitcom Dad's Army.

Following an attack on the modern banking industry, he asked former Royal Bank of Scotland chairman Sir Tom McKillop: "Could we get back to Capt Mainwaring running a bank we could trust?"