Vince Cable, the Business Secretary, has sent a report to City regulators concerning RBS deliberately putting “good viable” businesses into default so it could make more profit.
This is nothing new to the PRS as there have been many reports of banks calling in commercial loans of large portfolio landlords forcing them to sell in some cases.
The allegations are that small businesses are being purposely distressed so that the bank can move them into its Global Restructuring Group (GRG) lending division, which specialises in handling higher risk loans and then potentially seizing their assets all under the excuse of removing bad debt from the bank’s books.
The evidence was compiled by a report by Lawrence Tomlinson a government adviser and is being sent to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Mr Cable said “We are pretty confident that the evidence is solid. We want to be absolutely clear that this kind of thing is not going on today.”
“I am, however, confident that the new management of RBS is aware of this history and is determined to turn RBS into a bank that will support the growth of small and medium-sized businesses.”
Mr Tomlinson who is an independent entrepreneur was very shocked by what he found and said “I feel really sick sometimes, it is really disturbing. It is ruining people’s businesses for sure, and in some cases having a huge impact on their personal lives too, even leading to family breakdown.”
RBS have since said that it was already committed to an internal investigation into customer treatment and that it will implement the reports findings in full.
Shockingly the bank is 81% state owned, which means it may have been acting against the interests of the very public that bailed it out of the credit crisis, and has opened itself up to extensive legal action which we will all ultimately pay for.