RBS has hired a law firm to investigate claims of "unscrupulous" treatment of small businesses - described as "shocking" by George Osborne. A new report alleges that the lender drove firms to collapse to buy back their assets at rock-bottom prices.
Once again we have the bank that we own most of becoming a poster child for bad behaviour in the banking industry.
It's worth saying though that we have been told about cases where other banks have forced companies to revalue their properties, sometimes with some pretty grim consequences.
But I think it is also worth saying that while there is a lot of evidence - some of it in this report, some of it that we've heard over that last couple of years - of a lot of sharp practices and sharp elbows going on when companies go into trouble.
It's quite another thing to say that there is actually systemic evidence of fraud and abuse of this kind.
Having read this Tomlinson report, I'm not quite sure that there is quite enough evidence in there to say there is absolutely categorical proof of fraud or systematic things going on that really shouldn't have done.
That said, RBS would admit privately that not everything has gone as it should in some cases, there have been some things they wish they hadn't done.
But this is again another reminder of that nasty hangover that we are still all struggling with of that binge of credit, when lots of banks lent to businesses that probably could not afford it and they are still, more than five years on, having to clean up those mistakes.
RBS chief executive Ross McEwan wrote to Sir Andrew Large, Deputy Governor of the Bank of England, to confirm that Clifford Chance will investigate small business lending.
Your report also highlights that when times are tough for our customers, some have said they were angry about the treatment they received.
As you say in your report, many are happy with the skills and expertise we provide at times of financial distress, but to ensure our customers can have full confidence in our commitment to them I have asked the law firm, Clifford Chance, to conduct an inquiry into this matter, reporting back to me in the new year.
It is important that we get this right, especially as our regulators want the bank to remove problem loans more quickly.
State-backed Royal Bank of Scotland has hired a law firm to investigate claims of "unscrupulous" treatment of small businesses after a report alleged that the lender drove firms to collapse to buy back their assets at rock-bottom prices.
Chancellor George Osborne said the reports about RBS were "shocking". He told ITV's Daybreak:
We are actively trying to seek out these problems, we are not trying to brush them under the carpet.
We are trying to make sure the banks are working for small businesses, the banks are working for hard-working families.
We are, of course, investigating now the findings of this report but, generally, what I've been trying to do is make sure, which is fingered in this report, is working for the families of this country.
A Government adviser's damning report on RBS' treatment of small firms accuses banks of "heavy-handed profiteering and abhorrent behaviour" towards businesses.
The 20-page Tomlinson Report, which Business Secretary Vince Cable has passed to the Financial Conduct Authority, details what is terms a conflict of interest in the lender's relationship with small firms and its property arm West Registery.
Lawrence Tomlinson, who compiled the dossier, accuses RBS of "engineering" the collapse of some small businesses so it could buy their assets back on the cheap.
Explosive accusations levelled at Royal Bank of Scotland accuse the taxpayer-backed lender of "engineering" the collapse of some small firms in order to buy back the businesses' properties and assets at rock-bottom prices to boost its property arm.
An independent report compiled by businessman Lawrence Tomlinson, who is entrepreneur in residence at the Department for Business, Innovation and Skills, claims to have evidence of RBS' "unscrupulous" treatment of small businesses.
He says that there is a conflict of interest between RBS' Global Restructuring Group (GRG) division, which is designed to help small firms "get back on their feet" and its property portfolio West Register.
He says some firms not necessarily in immediate financial distress have been hit with exorbitant rates and fees, which in some cases cause them to collapse, allowing RBS to buy their property and assets on the cheap.
Lawrence Tomlinson, who acts as entrepreneur in residence for the Government, has told ITV News that there have been "huge conflicts of interest" with the Royal Bank of Scotland's property portfolio and attempting to help small businesses "get back on their feet".
A Royal Bank of Scotland unit that is reported to have imposed harsh conditions on loans, was key to helping the bank face up to its commercial property "mistakes" made in the run up to the financial crisis, said an RBS spokesman.
It is understood the allegations focus on the bank's Global Restructuring Group (GRG) lending division, which handles loans classed as being risky.
RBS did more than its fair share to fuel this and commercial property lending was one of the key drivers of our near collapse as valuations rapidly plummeted.
GRG successfully turns around most of the businesses it works with, but in all cases is working with customers at a time of significant stress in their lives. Not all businesses that encounter serious financial trouble can be saved.
– RBS spokesman
The group said it was "already committed" to an inquiry on how it treats small firms, following recommendations in a report due to be published tomorrow.