That is the accusation made by John Fingleton, the former Chief Executive of the Office of Fair Trading (OFT) who recently tried to set up an account for his own small firm.
In a recent article published in the Financial Times, Mr Fingleton called for a radical shake up of the banking system, arguing that they are failing to stimulate economic activity in the UK.
"We hear that many banks are casinos; they are not lending enough to small businesses, suppressing growth. But things are worse than we thought: they may not even know how to run banks," he noted.
More specifically, Mr Fingleton bemoaned the move towards centrally imposed controls, which now supersede the opinions of experienced staff members.
After being rejected by the major banks in the UK, Mr Fingleton turned his attention to smaller banking firms such as Metro Bank and Handelsbanken.
Consequently, these lending institutions have managed to seize a larger share of new business in the UK, providing much-needed support to the small business community.
"Standardising and centralising decision-making has been counterproductive for banks and the wider economy," he added.
"If my effort to open a simple business account reflects a collective inability to distinguish high-growth businesses from bad credit risks in their lending decisions, it is hardly surprising UK productivity figures are so dismal."
This comes shortly after the Forum of Private Business revealed that the overwhelming majority of small businesses believe that business rates are too high.
Two-thirds of firms questioned said that they saw no benefits to the money they had paid in tax.
Helen Dickinson, the British Retail Consortium's Director-General, called on Chancellor George Osborne to make changes to business rates in next month's Budget.
Explaining that the retail industry is a major force for good, she added: "It's the UK's largest private sector jobs provider and has been a powerhouse for investment and growth, even during the relentlessly tough times of the last few years."
Posted by Jacob Williams