The British Bankers' Association has launched the first ever "Banking Code" aimed specifically at supporting small business in their relationships with banks.

The code, which will take effect from March 31, will focus on empowering small businesses, helping them to understand and manage the relationship with their bank by offering detailed advice on standards of service, individual products and dealing with financial difficulty.

Forum Response: British Bankers Association

Ian Mullen, chief executive of the British Bankers Association, told ePolitix.com: "This research shows that now, more than ever, banks and SME's need to have strong and positive relationships. It demonstrates how banks can support businesses, not only by providing them with finance of this kind, but also advice on how to better manage their cash flow or survive a period of particular financial difficulty.

"Whilst banks have often been criticised for their lack of transparency and helpfulness to business customers, our research shows that this often arises through basic misunderstanding. In addressing this concern, the Business Banking Code aims to help overcome some of the problems customers have experienced in the past, and is part of a programme of continuous improvement in standards of customer service.

"In today's highly competitive business banking marketplace, it is essential that SME's have the confidence to know that their chosen bank is committed to providing a high standard of service and that they have proper redress if something should go wrong. By subscribing to the Code, a bank is clearly indicating that it is serious about providing that commitment."

Forum Response: Federation of Small Businesses

Stephen Alambritis, head of press and parliamentary affairs at the Federation of Small Businesses, told ePolitix.com: "The new Business Banking Code is a welcome recognition of the needs of small businesses in their relationships with banks.

"Crucially it sets benchmarks by which SME's can measure their banks performance and ensure they are getting best possible value for their business.

"It is in everyone's interests that small businesses thrive and prosper and the code, we hope, will help create more of the success stories we all enjoy hearing about."