MPs have warned National Savings and Investments it must "work hard" to win back customers and repair any damage done to its reputation in recent months.
The cautionary note came as Mel Stride, chairman of the Treasury Committee, told the state-owned savings bank it would have a "big role to play" in helping the government fund the costs of the coronavirus recovery scheme.
His comments follow concerns raised by the committee just before Christmas which claimed NS&I had caused a "great deal of anxiety" to consumers following a string of complaints about the bank.
At the time Mr Stride wrote to the NS&I chief executive Ian Ackerley citing concerns over the bank’s "dramatic cuts" to interest rates, low levels of customer satisfaction and its decision to stop paying Premium Bond winners by cheque.
At the end of November, NS&I’s interest rates for ‘direct savers’ dropped from 1 per cent to 0.15 per cent.
Those in an investment account saw their rates slashed by 79 basis points — from 0.8 per cent to 0.01 per cent — while income bonds fell as much as 115 basis points, also to 0.01 per cent.
Its premium bonds prize fund rate was reduced from 1.4 per cent to 1 per cent.
At the time, NS&I said the reductions would see the provider "align" its savings products with rates offered by other banks and building societies.
In a response published today (January 22) Mr Ackerley apologised to customers who experienced poor service last year and said he was determined to return NS&I to delivering a high quality service.
He said: "Regrettably, the combination of exceptional demand and significantly reduced capacity resulted in customers experiencing significant delays to call answering times and replies to correspondence, although our online services have continued to be available.
"We are implementing a detailed operational recovery plan to reduce call waiting times, address complaints more rapidly and reduce the backlog of customer queries."
Mr Ackerley said NS&I had recruited more operational staff, alongside opening four additional contact centres, and had paused its planned transition to paperless Premium Bonds prize payments to "reduce the stress on customers and our operations".
He said whilst the decision to phase out the payment of Premium Bonds prizes by cheque meant customers received prizes more quickly and securely, he admitted the change had been undertaken at a time when the savings bank's operations were under stress.
In response to the letter, Treasury committee chairman Mr Stride said: "An exodus of savers from NS&I when it cut interest rates in November was foreseeable and so it is disappointing that the average time to answer a customer’s call was 19 minutes that month.
"I would like to thank Mr Ackerley for his frank response, but the damage that may have been done to NS&I’s reputation over the last few months is worrying."