Members have called on Knight to resign after the trade association was forced to drop plans for a judicial review, the Telegraph reports.
The BBA lost a High Court verdict last month and had until today to make an appeal against the decision.
“The BBA’s handling of the PPI case has made us uncomfortable,” said a senior executive at one BBA member. “While we think it is an interesting legal and intellectual argument, it does the banking industry no good to be seen to be dragging its feet on the issue.”
The executive added: “Angela has been great for the industry, but I think we need someone less stringent now. There is a need for a diplomat who can begin healing the industry’s relations with the Government and the wider public.”
An executive at another BBA member said: “She has done a great job – but its time for a different voice. The landscape has changed. We no longer need to be so combative.
However, a spokesman for the BBA told the Telegraph: “PPI has been a member issue throughout on which we have been in close and constant contact at the highest level. There is absolutely no basis for your suggestion that the handling has been questioned or that anyone has chosen to personalise the issue in this way,” she added.