Royal Bank of Scotland was directed by the government and the European Commission to set up two funds worth a combined £775 million following its £45.5 billion bailout during the financial crisis.

The funding has become a source of contention among challenger banks who have complained that the Government has set the bar for applications too low, enabling bigger banks such as Santander, Clydesdale and TSB to be eligible for a piece of the pie.

The 11 organisations who have met the eligibility criteria contain just four newcomers to the banking scene - Monzo, Starling, Metro Bank and Hampden & Co.

Arbuthnot Latham & Co, Co-operative Bank, Nationwide Building Society, and Svenska Handelsbanken, sit alongside Santander, Clydesdale and TSB in the incumbent list.

Anne Boden, chief executive of Starling Bank, says: “Today’s announcement is an important step towards bringing much needed competition and innovation to the business banking market - an area that has for too long been underserved by incumbent banks.

“It is vital that the RBS fund delivers on its objective to introduce new competition into our stagnant business banking market and that means backing genuine disrupters.”

Godfrey Cromwell, BCR’s chairman, dismisses the gripes: “It’s very good news that a broad selection of organisations have stepped forward and made a diversity of offers right across the SME client-base. Today’s announcement marks an important milestone for Incentivised Switching.”

The contenders must now prove their operational readiness ahead of the creation of a dedicated Website that will place the organisations’ offers in front of former Williams and Glyn’s SME customers at the end of February 2019.

Cromwell says: “Customers will be the real decision-makers here. We look forward to getting through the contracting stage and seeing these offers made public so that customers can react. We anticipate that a further application round in Q2 2019 will widen the range of offers still further.”