British banks should simplify charges for overdrafts to help make the current account market more competitive by allowing people to decide easily who offered best value.
This is according to Britain's consumer watchdog.
The Office of Fair Trading held back from involving the Competition Commission because of a new, easier account-switching service coming in September.
Lloyds and Royal Bank of Scotland are also set to sell branches.
The OFT said its review of the £9 billion sterling market found major banks had increased market share since its last assessment in 2008, entry by new players remained infrequent, and consumers, lacking confidence in the switching process, still rarely switched to a rival provider.
The British Bankers' Association welcomed the decision not to make a referral to the Competition Commission.
The OFT said it will look at the matter again in 2015, adding there had been improvements in the market, with customers now saving up to £928m annually from a fall in unauthorised overdraft charges from 2007-11.
"Overall, a combination of a lack of competition, low levels of innovation, and customer apathy in the face of unclear costs and a lack of diversity in the choices of current accounts available mean that this market is not working well for consumers or the wider economy," the OFT said.