The crisis ridden Royal Bank Of Scotland has announced that it will compensate small business owners for up to £400 million, because of the result of RBS’s improper handling and treatment, that it dished out to these small business owners during the financial crisis of 2008.
Small business owners have been leading a legal fight against the Royal bank Of Scotland behavior towards them between 2008 and 2013. Many small business owners complained against exorbitant fees charged to them by the bank.
Ross McEwan, the chief executive of RBS, told theguardian.com
“We have acknowledged for some time that mistakes were made. Some of our customers went through what was a traumatic and painful experience as a result of the crisis. I am very sorry that we did not provide the level of service and understanding we should have done.”
The complaints by the small business owners will be overseen by a retired high court judge. And the government is looking into whether it should halt to former staff and executives and persons involved in leadership roles with the bank currently, who all were involved with the Global Restructuring Group, which is at the root of the complaints.
Also from theguardian.com
The allegations first surfaced in 2013 when Lawrence Tomlinson, a businessman who was an adviser to the then business secretary, Sir Vince Cable, compiled a dossier alleging the bank deliberately wrecked small businesses to make profits.
Some 12,000 small businesses were forced into GRG but only 4,000 will automatically receive a refund of “complex” fee. In total, some 8,000 were potentially viable when they entered GRG, while 4,000 were facing insolvency.
Confirmation of the compensation plans – details of which began to emerge on Monday – immediately sparked concerns that the sum being aside by the 73% taxpayer-owned bank was inadequate.
“Given the damage to the lives of RBS’s customers, £400m is wholly inadequate and is a cynical attempt to evade accounting fully for the consequences of RBS GRG’s action. We are disgusted by this proposal,” said David Stewart, of the RBS GRG Business Action Group, which has more than 500 members demanding £2bn in compensation. Another group, RGL Management, is pressing on with a legal claim of at least £1bn.