The Financial Conduct Authority has ordered Royal Bank of Scotland to appoint an independent skilled person to investigate allegations that the bank mistreated customers, following a report which claimed the bank had forced firms out of business to benefit its own in-house property arm.
The bank launched an inquiry earlier this week (26 November) after former deputy Bank of England governor Sir Andrew Large submitted a report which found customers were angry with the way RBS treated them during tough times.
Sir Andrew was commissioned by Vince Cable, secretary of state for business, innovation and skills, to write an independent report into RBS’s lending to SMEs. It is claimed the report found RBS was deliberately wrecking viable small businesses to make profits for the bailed out bank.
The regulator has also sent a letter to other - unnamed - banks urging them to review the report and ensure their staff have no engaged in similar behaviour.
Although commercial lending is not a regulated activity under the Financial Services and Markets Act, the regulator said it will decide from the review if any wrongdoings fall under its remit and take further action if so.
Clive Adamson, director of supervision at the FCA, said: “These allegations, if proved, raise serious concerns about how banks’ treat their customers.
“An SME’s relationship with its bank is essential for any business to have a chance to succeed, and claims like the ones made threaten to undermine that. We expect all firms to act with integrity and put customers at the heart of their business.”
