A Labour government would "turn the tide" by creating two "challenger" banks to boost High Street competition he said.
In his speech at the University of London this morning Miliband claimed "too much power is concentrated in too few hands" and this has had a detrimental effect on enterprise and jobs.
A Labour government, he said, would instruct the Competition and Markets Authority to report within six months of the May 2015 general election what the limit on a bank's market share should be and the timetable for any sell-off of branches, which should be completed by 2020.
He added: "If we carry on as we are, we will end up stuck with the same old banks dominating our high street: the old economy.
But Bank of England Governor Mark Carney told the House of Commons Treasury Committee earlier this week: “Just breaking up an institution doesn't necessarily create or enable a more intensive competitive structure."
Matthew Parden, managing director, Duncan Lawrie Private Bank, said: “The principle behind capping market share has its merits. Having banks that are too big to fail puts a stranglehold over the UK economy and the last five years have demonstrated this. However, there are more ways to encourage competition in the banking sector than just to introduce new banks.
“Many of the big high street banks have already cut back the number of branches they have without it impacting their market strength. Forcing banks to sell off more branches is not going to reduce the tight grip that the big four have on the industry.
“Setting up a new bank is not going to be a straightforward operation, however there are already a number of alternative banks and building societies in the market that could be utilised. Many of these organisations place an emphasis on having a strong balance sheet and offering customers a superior customer service experience based upon traditional banking values.
“Rather than looking to set up new banks, more should be done to encourage and support the growth of alternative banks that have already proven themselves capable and responsible enough to take on the role.”