Banking boss Dame Alison Rose has apologised to Nigel Farage for “deeply inappropriate” comments made about him in a report on his suitability as a Coutts customer.
In a letter to Mr Farage, NatWest’s CEO said the comments did not reflect the bank’s view.
UKIP’s ex-leader said his account was closed for political reasons while the bank said it was a commercial decision.
The government is also to force banks to explain account closures.
Dame Alison said she was “commissioning a full review of the Coutts’ processes” on bank account closures.
In the letter she added that 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 apology comes after Brexiteer Mr Farage obtained documents from a Coutts meeting in November last year where “commercial” reasons and “reputational risk” associated with his political views were cited as reasons for considering terminating his account with them.
The 40-page report mentioned Brexit and his alleged links to Russia.
Dame Alison said she welcomed plans announced on Thursday by the Treasury for new banking rules and said she would implement the recommendations.
Banks will be forced to explain why they are closing bank accounts and 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 Treasury has said it had already been investigating account closures after PayPal temporarily suspended some accounts last year.
