RBS has paid out £115 million in compensation to businesses over "complex fees" tied to the long-running scandal over alleged mistreatment of customers.

It comes as a legal claims group criticised the financial regulator for presiding over what "appears to be a whitewash" over RBS saying it failed to acknowledge "serious and deliberate harm" it says was caused by the bank division that dealt with struggling businesses.

RBS confirmed that the potential bill for compensation claims to small business customers is expected to remain at £400 million. The Edinburgh-based bank set up the compensation scheme last year following allegations its now defunct Global Restructuring Group mistreated 12,000 companies it was meant to help.

The Financial Conduct Authority having reiterated that the "most serious allegations" against GRG had not been upheld said it is considering "further action" over failings having identified "other concerns" over the treatment of small and medium-sized enterprises (SMEs).

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But RGL Management Limited, formed to gather claims against RBS over the conduct of the now defunct GRG said the FCA was "making excuses... as to why it cannot bring the bank to justice".

It said the FCA report did nothing to redress the "devastation" inflicted on business owners by RBS.

RGL said: "We have always said that the FCA report will be a whitewash and that now looks to be the case. From what we understand, the FCA has failed to acknowledge the serious and deliberate harm caused to businesses through RBS’ Global Restructuring Group.

"If the FCA cannot, or will not, take action against the bank then it is important for distressed businesses and individuals to seek justice in the courts. RGL Management is the only group ready to do so, with expertise, funding and lawyers in place.”

GRG, which operated from 2005 to 2013 and at its peak handled 16,000 companies, repeatedly faced claims that it deliberately forced small businesses to the brink of collapse so it could profit from their demise by selling off their properties. RBS has always denied the claims.

The taxpayer-backed bank confirmed it had not yet been approached by Police Scotland which is looking into reports it has received from some small business customers - and would "cooperate with any request for information made by Police Scotland".

The interim FCA report into GRG, did identify some failings, including that 92% of viable firms it handled had suffered "inappropriate action", such as interest charges being raised or unnecessary fees added.


Andrew Bailey, chief executive of the FCA, said the regulator was investigating matters arising from the report and “focusing on whether there is any basis for further action within our powers”.

He said: "While the most serious allegations were not upheld... the report did identify other concerns about the treatment of SME customers. RBS has accepted that it did not meet the standards it set for itself which impacted on how it treated some of its SME customers."

The watchdog could take action against the bank or individuals.

The FCA rejected calls from MPs to publish the full report that was undertaken by a “skilled person”, in this case consultants Promontory.

RBS said it welcomed the FCA’s confirmation that the most serious allegations have not been upheld, and that the steps it announced in November to put things right for customers remained appropriate.

RBS chief executive Ross McEwan said the "most serious allegations made against the bank have not been upheld".

HeraldScotland: RBS chief executive Ross McEwan. Picture: Gordon Terris.

"The culture, structure and way RBS operates today have all changed fundamentally since the period under review," he said.

The bank has dealt with more than 900 complaints going back a decade, Mr McEwan added.

The allegations about GRG gained prominence four years ago when a former government adviser, Lawrence Tomlinson, published a report arguing the RBS division drove clients to the brink so the bank could buy their properties and make a profit.

The new report found that inappropriate treatment of small business customers was "widespread" in areas including a failure to support small businesses in ways consistent with good turnaround practice It placed an undue focus on price increases and debt reduction without considering customers' longer-term viability.

There was a failure to handle customer complaints fairly and to deal with certain conflicts of interest Nicky Morgan, who chairs the Treasury select committee, said: "It has taken the FCA too long to publish its summary of the skilled persons' report, so this is not before time."

The committee is carrying out its own assessment, which will report back later this week, she added.

Mr Bailey is due to appear before MPs on the committee on next Tuesday.