The treasury is to order state-backed banks Lloyds Banking Group and Royal Bank of Scotland (RBS) to make over £80 billion of credit available to businesses this year.
Under new lending targets to be unveiled in the Budget, the treasury is demanding RBS makes around £45 billion of gross lending available and Lloyds around £40 billion.
As a condition of using the asset protection scheme, RBS and Lloyds were set targets. Both firms have since said they will not meet the targets as a result of firms paying down loans.
Under the conditions, RBS had to provide £16 billion of net lending to businesses and Lloyds £11 billion.
As the amount that is repaid is often out of the bank's control, the treasury has instead asked the state-backed banks to change their lending targets to businesses.
Sky City editor Mark Kleinman told Jeff Randall Live: "That's a significant shift from last year's targets of about £75 billion, despite the fact that the British economy is forecast to show only modest growth in 2010 (and that's the optimistic view)."
Shares in UK banks rose on the FTSE 100 this month. Lloyds also revealed that it expects to post a profit this year.
