RIO DE JANEIRO (Reuters) - Center-left populist presidential candidate Ciro Gomes vowed on Wednesday to reduce concentration in Brazil's banking sector if elected in October, warning that he would open the sector up to more foreign competition if necessary.

Gomes said 85 percent the country's bank transactions were in the hands of five banks: Banco do Brasil SA, Caixa Econômica Federal [CEF.UL], Santander, Itaú Unibanco Holding SA and Banco Bradesco SA.

By contrast, he said, the United States has "thousands" of banks competing by offering lower fees and interest rates to win more customers.

"The concentration here is criminal ... I want to do this to protect Brazil's financial system. If they don't understand, I will have to open the door to international banks and I don't want to do that," he said before a panel of journalists.

Gomes, who has moved up to second place this week in polls of voter intentions, explained his plan to help the 63 million people listed as delinquent debtors by Brazil's SPC Credit Reporting Agency.

If the banks offered discounted credit to individuals, the government would ask the central bank to reduce their reserve requirement, he said.

"Not a cent of public money will be spent and people will have the protection of the government to refinance their debt on civilized terms, he said.

The relief plan has been music to the ears of heavily-indebted Brazilians and contributed to his improved polling, though he trails far behind front-runner, the far right candidate Jair Bolsonaro.

The polls, however, show Bolsonaro losing against most of his main adversaries in a second-round run-off.

With popular former president Luiz Inacio Lula da Silva banned from running due to a corruption conviction, Gomes could well make the run-off and beat Bolsonaro, analysts say.

Gomes, who has touted his record for fiscal discipline as two-time governor Ceará, vowed to protect Brazilian industry, and pointed out that U.S. President Donald Trump was doing just that slapping import tariffs on steel and aluminium and other imports from China.

The candidate was interviewed by reporters from O Globo and Valor Economico newspapers and Epoca news magazine.

(Reporting by Rodrigo Viga GaierWriting by Anthony Boadle)

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