THE Royal Bank of Scotland could be forced to pay hundreds of millions of pounds in compensation to out-of-pocket customers after a devastating IT failure.
The taxpayer-backed banking group, which includes Natwest, was forced to further extend its opening hours yesterday as it battled a backlog of transactions caused by the glitch, which has affected millions of people throughout the UK.
Last night former LibDem Treasury spokesman Lord Oakeshott called for RBS chief executive Stephen Hester to forgo his bonus following the problems. Mr Hester turned down last year's £1million bonus under political pressure in January.
The peer said: "Like the boss of a water company who has turned customers' taps off for a week, there is no question in my mind that Stephen Hester should not be eligible for a bonus for 2012 after this fiasco."
Some 1200 NatWest and RBS branches will be open from 8am to 6pm for the rest of the week after opening on a Sunday for the first time.
Affected customers have taken to social networking sites to vent their frustrations, threatening to close their accounts.
Others have complained that, although they do not bank with RBS or Natwest, they have not received their wages because their employers do.
Finance analyst Gary Greenwood, of Shore Capital, claimed the saga could cost RBS – which is 80% state-owned – hundreds of millions of pounds.
He said: "The extra cost of branch openings and fee waivers is likely to cost the company tens of millions of pounds, although compensation costs for customers could push the total cost into the low hundreds of millions."
The banks first experienced problems overnight last Tuesday due to a "system outage" caused by a corrupted software update on RBS's payment-processing system.
This issue has now been fixed but caused a massive backlog in transactions.
The banking group has promised to refund any charges customers incur through not being able to pay bills.
But according to consumer watchdog Which?, customers will not automatically be entitled to extra compensation. The Financial Ombudsman Service has advised customers to keep a record of how they have been affected in case they need to complain in future.
The Financial Services Authority has also urged other banks to be more lenient with their own customers if they missed payments because transfers from RBS accounts had not come through.
Mr Hester yesterday conceded the bank had let down its customers and issued a public apology.
He said: "I am very sorry for the difficulties people are experiencing. Our customers rely on us day in and day out to get things right, and on this occasion we have let them down. This should not have happened."
Susan Allen, director of customer services at RBS Group, insisted that progress was being made and expressed cautious optimism that RBS and NatWest customer account balances would be largely back to normal at the start of the working week.
However, customers were still fuming yesterday as they continued to experience problems.
One customer from Glasgow wrote on Twitter: "I have had my bank charges of £12.95 taken this morning but my salary payment which should have gone in today hasn't appeared. Goodbye NatWest, from a customer of 25 years' standing."
Another customer, from Hamilton in South Lanarkshire, tweeted RBS saying: "Haven't got my wages today and also my daughter's wages went in Friday and back out and neither of us have money. Please can someone give us timescales for when wages will be in account?"
Some customers are unable to view an up-to-date balance, payments such as direct debits for bills have not been made and some wages have not been received.
An RBS group statement issued yesterday said: "Our branches opened early this morning and our phone lines are open as usual."
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