The FSA has agreed to temporary arrangements for Barclays, Lloyds Banking Group and RBS to handle Payment Protection Insurance (PPI) complaints.
Under FSA rules PPI complaints have to be responded to within eight weeks.
However the FSA extension allows firms extra time to deal with claims which have been put on hold and complaints received since the failure of banks' judicial review to avoid paying out claims.
PPI complaints still with the bank but put on hold during the judicial review will now receive a decision by the end of August.
Grievances received after the conclusion of judicial review but on or before the 31 August will be responded to within 16 weeks.
Those complaints received on or after 1 September and before 31 December 2011 will be responded to within 12 weeks.
Strict conditions have been imposed on the temporary time extensions, the FSA said.
Firms with the temporary time extension will have to keep PPI complainants and their customers fully informed and provide the FSA with regular reports on compliance.
The FSA expects all PPI complaints handling to return to the requisite eight-week standard by 1 January 2012 at the latest.
Extensions only apply to Barclays, Lloyds and RBS. All other PPI complaints are unaffected.
A number of firms decided to put some or all PPI complaints on hold when the British Bankers' Association launched a judicial review of the FSA's new PPI complaints handling measures.
The FSA and the Financial Ombudsman Service won the case and the BBA decided not to appeal on 9 May 2011.
