RBS shrugs off latest IT glitch and says it has reached a turning-point

Treasury committee chairman Andrew Tyrie has said the bank faces a potential summons to explain the episode, while the British Bankers Association has called it "unacceptable".

But the issue was raised only by shareholder Robert Beattie, who questioned how the bank could achieve its goal of being 'number one for customer service' if it failed to rectify its IT problems.

Sir Philip responded: "We do apologise to all customers who were inconvenienced by last week's outage, mercifully it was nothing like the issue we faced in 2012, that was overwhelmingly because of all the very substantial investments we have made in that time." He said "most of the kit we have is pretty new" and the Financial Conduct Authority had confirmed in 2012 that the bank was "pretty strongly invested in new equipment".

Sir Philip said the incident had affected only five per cent of the bank's transactions in a single day, and those affected would be properly compensated, adding: "We have not yet identified...a root cause."

Mr McEwan said: "We have spent £750m on making our systems more resilient so the 2012 issue doesn't happen again." He said it had been due to a "file not connecting properly" and the bank would be "doing a full review for the board and our regulator".

Sir Philip had said that on his arrival in 2009 the bank was "overstretched, over-exposed, and underpowered", but since then it had shrunk its balance sheet by £900billion and lifted its capital ratio target from 8 to 13 per cent, while the share price had quadrupled. But he "did not anticipate in any way the £10bn of regulatory fines and litigation charges and customer redress" which had delayed its capital rebuild and reduced shareholder value.

Sir Philip said the government's decision to begin selling its shares would "undoubtedly be a turning-point for RBS and welcomed we believe by investors generally", adding: "RBS has made great progress, it has been fundamentally rebuilt."

Mr McEwan said the bank had "delivered against every commitment we made in 2014".

The chairman was quizzed by shareholder Ben Travers-Smith of the Move Your Money campaign on why RBS had in 2010 promised not to close the "last bank in town" yet had in the past two years closed over 160 such branches to date.

Sir Philip said: "The main issue really is what customers want overall...customers are moving and we have to move with them." He went on: "We can't go on doing wrong things simply because a few years ago we made the wrong decision."

Mr McEwan said the bank's hand had been forced by other banks "rushing to close the second last" in town. He said: "Since then we have put in 11,500 new points that customers can use to pay money in and take money out." The bank's tie-up with the Post Office was helping that network survive, he added.

The meeting heard at length from some of the small business customers who hold the bank responsible for the destruction of their companies. Robert Mitchell said there was a "massive risk to this bank going forward" from litigation by companies, which could become "the business PPI". But he said there appeared to be a "spirit of new leadership and transparency" in the bank, with Mr McEwan having agreed to review his case file on 450 businesses.

Questioned by a shareholder on whether 'free banking' would survive, Sir Philip suggested that free current accounts had helped to create the PPI mis-selling scandal, by forcing banks to compensate for low returns in one area with "inappropriately high returns" in others. "If you get no charge for your current account, it means some other product that the bank is selling to you must compensate," Sir Philip said.

*The government has cut its stake in Lloyds Banking Group to below 17 percent, UK Financial Investments has said. It takes the sum recovered for the taxpayer to £11.5bn.