15th Jan 2015 08:36
LONDON (Alliance News) - Royal Bank of Scotland Thursday launched a "thorough and proactive review" after revealing that it has identified shortcomings in the way it explained to customers the details of a UK government lending initiative for small businesses with viable business proposals that lack security for conventional lending.
According to the Royal Bank of Scotland Group PLC website, the bank has launched the investigation following an exercise which identified a number of instances in which it did not properly explain to customers how borrower and guarantor liabilities work under the Enterprise Finance Guarantee.
The bank said it conducted the exercise following discussions with the British Business Bank, the body established by the UK government to manage the scheme.
RBS said it remains committed to the scheme, under which the bank says it has lent more than GBP900 million to 9,000 small businesses across the UK.
"EFG is a hugely important scheme that has helped many businesses continue to trade today," Alison Rose, chief executive, commercial and private banking, said in a statement. "This is why it is so important that our staff adhere to the highest standards to ensure that customers fully understand the features of the product. I am not satisfied that we have met those standards in all cases."
"Following discussions with the British Business Bank, we have taken action to put this right. We have now made sure that EFG loans will always be given appropriately. We are implementing a thorough and proactive review of affected, and potentially affected, customers. Any customers that have been affected will be contacted directly by the bank to ensure they are put back in the position they believed they would have been in," Rose added.
RBS shares were up 2.0% at 370.00 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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