Millions of current account customers face an increase of up to 20 per cent in monthly fees as banks seek to boost revenues before a ruling by the Office of Fair Trading (OFT) that could cap overdraft charges.

An estimated seven million consumers, already squeezed by soaring food, fuel and utility costs, will see the monthly charge for their current accounts jump as banks look for new ways of raising profits.

Royal Bank of Scotland, NatWest, owned by RBS, and Lloyds TSB are all raising monthly fees for customers. The rise will hit those who have signed up to packaged current accounts, which include extras such as travel and mobile phone insurance, to justify the monthly fee.

About two million Lloyds TSB customers with Gold and Platinum accounts experienced monthly charge increases of £2 to £12 and £17 respectively on May 1. The bank is the market leader in packaged accounts. It recently appointed Helen Weir head of retail banking; however, the decision to increase charges was made before she joined the bank.

RBS and NatWest are increasing charges by 95p on the Royalties and Advantage accounts. RBS increased its charges on May 5, and NatWest is to introduce the new fees from May 31. NatWest customers with an Advantage Private account will see their monthly fee rise by £1.40 to £19.95.

There has been a huge increase in the number of customers opting for packaged accounts, and an estimated 40 per cent of RBS and NatWest's 14 million current account customers pay a monthly account fee.

Lloyds TSB, RBS and NatWest are part of a group of banks and a building society considering an appeal against a High Court ruling at the end of last month that allows the OFT to investigate overdraft charges levied by banks on customers who exceed their limits. The charges, which the OFT believes are disproportionately high, can be as much as £39.

There is speculation that the banks will be forced to consider other ways to raise money, including ending free banking for all customers, if the OFT is able to force a cap on overdraft fees.

David Black, of Defaqto, the financial analyst, said: “The current account market is going through a lot of changes as a result of the OFT court case. If the conclusion is that these charges are too high, the OFT could seek to force banks to reduce them. If that's the case, banks have to look for other ways of making money.”

An official of the OFT, which is also about to release a market report into the retail banking industry, said that it feared a “waterbed effect” if overdraft charges were capped, whereby a fall in certain charges would serve only to push up charges elsewhere.

The three banks have defended the move, claiming that the higher fees reflect an increased range of benefits offered to customers. They also said that customers must choose to open the accounts and point out that the Banking Code prohibits banks from transferring customers from free accounts to fee-paying accounts without their permission.

A Lloyds TSB official said: “Customers told us they would value additional benefits, and to cover the cost of these we have increased the cost of the Gold and Platinum accounts. Our added-value accounts are extremely popular with customers and continue to offer very good value for money.”

A NatWest official said: “The packaged accounts offer our best-ever potential savings for customers with the addition of new features, and this has been reflected in modest price rises.”

Almost 1,000 jobs will be lost in Cumbernauld, North Lanarkshire, with the planned closure of a call centre for the Barclays Goldfish credit card. It employs about 900 people, and a further 90 employees at the Canary Wharf head office will also go.

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