Government advisor reveals that RBS profited from struggling small businesses
Royal Bank of Scotland, is accused by a government advisor of pushing struggling small firms into its turnaround unit, where the first are charged higher interests and their assets controlled.
"Some of these allegations are very serious and I am waiting for an urgent response as to what actions have been taken," Britain's business secretary Vince Cable said in a statement on Sunday towards RBS and financial regulators.
RBS, is 82% percent owned by taxpayers as it was rescued by the government during the 2008 global financial crisis. RBS said that it was "already committed to an inquiry to investigate how customers are treated by RBS when facing financial difficulties and ensure that we provide them with appropriate support".
Andrew Lage, a former deputy governor of the Bank of England was asked by RBS to undertake an independent review of its lending practices. According to Reuters, in his initial findings, published earlier in November, Large said a small proportion of customers had a strongly negative perception of RBS, in particular relating to the treatment of customers in financial distress and recommended the bank looked into those specific concerns carefully.
Cases like this is not unusual for banks as they have to quickly remove problem loans from its books, especially when it is exposed to risky assets like what RBS did following its 45 billion pound bailout.