RBS faces possible criminal investigation

RBS faces possible criminal investigation

A spokeswoman for RBS declined to comment.

Earlier on Monday, Mark Carney, the Governor of the Bank of England, said it was “remarkable” and “shocking” that RBS’s treatment of small businesses was not picked up sooner, if it took place on a wide scale.

Speaking in front of the Treasury Select Committee, the central banker said the behaviour documented in the Tomlinson report on RBS was both “deeply troubling and extremely serious”.

He added that it was the direct responsibility of the Financial Conduct Authority to conduct an investigation, and not the central bank itself . However, he said he did not want to downplay a matter that must be pursued “ to the fullest extent of the law” .

He added: “We take the view that the behaviours documented in the report are deeply troubling and extremely serious.”

RBS on Monday appointed law firm Clifford Chance to conduct an inquiry into the allegations. Business Secretary Vince Cable has demanded an urgent response from the bank and Britain’s financial regulator. He has passed on a dossier to the City regulators containing a series of complaints against RBS and its turnaround unit.

The division handles loans classed as being risky and is understood to have the power to scrap loan deals, impose inflated interest rates and charge hefty penalties.

The report alleges that firms not necessarily in immediate financial distress are “engineered” into GRG, sometimes through small technical breaches of loan terms, such as late filing of minor financial information.

They are then hit with high rates and fees, which in some cases cause them to collapse, allowing RBS to buy their property and assets on the cheap for the benefit of its West Register property arm, it is alleged.

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