Metro Bank, which is promising a premium service to consumers who open an account with it, has been told by the Financial Services Authority (FSA) that subject to the investment of capital (ie proof of funding), it is now authorised as a deposit-taking institution.

Metro Bank was informed of the decision by the FSA yesterday, and has now told its investors of the development in order to access the money pledged by them to the new venture. This is essentially a technical process and should be completed by the end of next week.

Among Metro’s investors will be Fidelity and Wellington, two blue-chip institutions with successful track records.

That’s significant, because it will have helped to reassure the regulator during its assessment of Metro Bank’s board and management, its funding proposal and its business plan.

The FSA’s decision is another step towards more competition in the retail banking sector (albeit only a small one). A number of other lenders, including the Home and Savings Bank and Walton & Co, are also drawing up plans to launch this year.

Royal Bank of Scotland (RBS) and Lloyds Banking Group, meanwhile, are to dispose of hundreds of branches apiece, which ministers have said will stimulate new entrants to gatecrash the sector.

One of the intriguing aspects of RBS’s annual results, which it announced last week, was that the bank added 360,000 current account customers last year despite the turmoil of the previous 12 months.

Metro, which is promoting itself using the slogan ‘Love your bank’, is to open at weekends and for longer hours during the week, and will attempt to offer a friendlier shop-style service than customers have typically experienced at established high street banks.

That will include providing toilet facilities and enabling customers to open accounts within 15 minutes.

The FSA declined to comment, while Metro could not be reached for comment.