Royal Bank of Scotland has been accused by an MP of failing to help businesses in financial difficulties due to its alleged mis-selling of interest rate swap agreements (IRSAs).

Guto Bebb MP, chairman of the all-party parliamentary group on the issue, said the Financial Services Authority had told banks to give struggling businesses an interest payment moratorium, but the definition of "financial distress" was left to each bank.

Mr Bebb cited Barclays, which suspended interest rate swap payments for SMEs in financial distress, as an example of best practice in the industry.

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He added "It is also massively concerning that the bank considered to be the least willing to suspend payments is RBS. Suspension of payments helps businesses to survive in the short term and not to fall into administration."

RBS said: "As agreed with the FSA, we will look at this on a case-by-case basis and prioritise companies in financial distress as we work through the cases."

Mr Bebb said MPs hoped to meet with the FSA, Barclays and RBS next week, to press for more urgent action. The MPs' committee also wanted to see the creation of a "redress platform" for SMEs, Mr Bebb said.

"We are talking with the FSA to get a separate and independent system in place, which is like a fund for businesses that cannot afford to be legally or professionally represented."

The FSA had claimed businesses did not need any external advice to enter the redress process.

"I would question that because of the complexities of the products, and not understanding the products is how we got here in the first place," Mr Bebb said.

Bully Banks, the SME campaign group with more than 1000 members, holds its first Scottish conference in Glasgow tomorrow. One focus will be Clydesdale Bank, which has now confirmed to its customers which products will be included in its review of IRSA sales.

Although the FSA reported last week that "in aggregate over 90% of sales by Allied Irish Bank (UK), Clydesdale and Yorkshire banks, Co-operative Bank and Santander UK in the pilot did not comply with one or more of the regulatory requirements", the Clydesdale claims that the FSA "have not made any findings that the bank sold any such products inappropriately".

The banks said they would review sales of three types of their Tailored Business Loan even though TBLs were loans outside the scope of the FSA review. But the Clydesdale said fixed-rate loans, "where the interest rate was fixed for the period of the loan or any part of it" were excluded.