The Office of Fair Trading (OFT) could tackle banks' overdraft charges on current accounts in its next bid to limit the power of large lenders.
The OFT recently argued that charges of £25 for late credit card payments were unfair, and it may enforce a lower cap, recent reports have suggested.
The final decision on the issue is expected in a matter of weeks.
However, in the meantime the watchdog has indicated it may extend its campaign to overdraft charges, according to the Daily Mail.
A spokesman told the newspaper: "We expect charges to be cost-reflective and not to cross subsidise other services...that applies to all bank charges."
Account holders can sometimes pay as much as £39 for exceeding the limit on their overdrafts.
However, the British Banker's Association refuted the claims that overdraft charges were unfair, saying they "reflect the cost of collection for accounts that have defaulted".
"These are not hidden charges. They are published on websites and in brochures," it said.
The news comes as the Competition Commission orders store card providers to draw greater attention to high annual percentage rates (APRs).
Cards with an APR over 25 per cent will have to include a "warning" on statements that cheaper forms of credit may be found elsewhere. To read more about current accounts, click here.
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