I would guess that could be the worst thing for the public and small businesses!
The banks would quite happily close branches that were in secondary locations where they are borderline profitable. It would mean that the most likely branches to be closed were those few remaining rural branches and those in smaller towns.
It would be better for the new competition that is emerging are protected from being bought out by the big banks.
The new supermarket banks, peer to peer lending companies as well as local community building societies and savings groups should not be able to be bought out by the bigger players. This will ensure future diversity in the sector without inconveniencing the customers of the big 5 banks.
Another thing that seems to have been not considered by this policy is the employment issue. Sell off hundreds of branches assumes that there would be a buyer and staff would be taken over as well. I would suggest that there are plenty of empty high street premises available for new comers to the market and therefore would increase employment in the shorter term.