The long-awaited FCA investigation into RBS’ controversial Global Restructuring Group (GRG) has shown no serious wrongdoing on their part however a number of problems were documented. These included ‘isolated poor practice’ and ‘failure to support SME businesses in a manner consistent with good turnaround practice’.
RBS has been saddled with controversy over the last few years after it was alleged their turnaround division were purposely forcing businesses into insolvency for their own profit. Many business owners came forward to report their businesses were turned upside down with loan and overdraft facilities stripped – the opposite of what they expected to happen. It was then alleged GRG made substantial profits by selling off business properties and assets from the administration or liquidation.
RBS plan to set aside an estimated £400 million to set up a new complaint scheme, complete with automatic refunds for affected business customers. Despite the FCA’s overall findings, the bank has admitted it “could have done better” and “did not always handle complaints well”.
RBS hopes the scheme will address ‘issues of the past’ and the relationship between the bank and its customers can heal and move on. The FCA has approved the bank’s new measures, stating they were involved with the development.
According to reports, the action group RGL Management are still planning to sue RBS next year, as it says businesses have lost out on well over £1 billion. The £400 million the bank is setting aside is ‘wholly inadequate’.