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Banking boss Dame Alison Rose has apologised to Nigel Farage for "deeply inappropriate" comments made about him in a document on his suitability as a Coutts customer.
The boss of NatWest Group said in a letter to Mr Farage that the comments did not reflect the bank's view.
UKIP's ex-leader has said his Coutts account was closed because the bank did not agree with his political views.
Mr Farage said Dame Alison should now be questioned by MPs about the issue.
Dame Alison's apology came after the government announced new plans to force banks to explain account closures.
She said that as well as apologising to Mr Farage, she was "commissioning a full review of the Coutts' processes" on bank account closures. Coutts, a private bank, is owned by the NatWest Group.
In the letter to Mr Farage she said she believed "very strongly that freedom of expression and access to banking are fundamental to our society and it is absolutely not our policy to exit a customer on the basis of legally held political and personal views".
The 40-page document, published by the Daily Mail, included minutes from a meeting in November last year reviewing his suitability as a client.
It stated continuing to have Mr Farage as a customer was not consistent with Coutts's "position as an inclusive organisation" given his "publicly stated views".
It mentioned Mr Farage's retweet of a Ricky Gervais joke about trans women and his friendship with tennis player Novak Djokovic, who is opposed to Covid vaccinations.
It gave several examples, including his comparing Black Lives Matter protesters to the Taliban, and his characterisation of the RNLI as a "taxi-service" for illegal immigrants, to flag concerns that he was "xenophobic and racist".
On Thursday Dame Alison also reiterated her offer to Mr Farage of alternative banking arrangements with NatWest and said she wanted to ensure they provide "a better, more transparent experience for all our customers in the future."
Following her apology, Mr Farage was asked if he thought that she should now resign.
"I think what needs to happen is the Treasury select committee needs to reconvene, come out of recess, and let's give her the opportunity to tell us the truth," he told reporters.
Mr Farage also said the Telegraph had reported how the BBC's business editor Simon Jack had sat next to Dame Alison at a dinner on 3 July and the next day he had then been called by Mr Jack and told "the reason my bank account had been closed was that I had insufficient funds in the account."
He said: "I want to know, did Alison Rose breach my client confidentiality? Did she break GDPR rules?"
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Plans to boost transparency
The apology to Mr Farage came after the Treasury announced plans to subject UK banks to stricter rules over closing customer accounts.
Banks will have to explain why they are closing accounts and they will have to give a notice period of 90 days before closing an account, to allow people more time to appeal against the decision.
The new rules are likely to be brought in after the summer, the BBC understands.
The changes will not take away a bank's right to close accounts of people deemed to be a reputational or political risk.
Instead, it will boost transparency for customers, the Treasury said.
Treasury minister Andrew Griffith said: "Banks occupy a privileged place in society and it is right that we fairly balance the rights of banks to act in their commercial interest with the right for everyone to express themselves freely."
Dame Alison said she welcomed the plans and would implement the recommendations.
The Treasury began looking at the issue in January after PayPal temporarily suspended several accounts last year.
On Wednesday Rishi Sunak warned it "wouldn't be right if financial services were being denied to anyone exercising their right to lawful free speech".
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2023-07-20 21:14:36Z
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