SMEs refuse to let RBS off the hook

published 7 September 2018

Royal Bank of Scotland could face new action over its treatment of small businesses during the financial crisis, despite the closure last month of an official inquiry into the scandal.

The SME Alliance, a small-business group with a strong track record of championing the interests of smaller firms, has announced its own investigation into RBS. The bank has been accused of severely damaging small businesses placed in its Global Restructuring Group (GRG) unit for struggling companies following the credit crunch.

The decision by the Financial Conduct Authority (FCA), the City regulator, not to take further action against RBS, announced last month, left many small firms feeling that justice had not been done, said the SME Alliance.

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It is appealing for firms to provide it with more evidence of RBS's wrongdoing in particular to substantiate claims that the bank insisted on personal guarantees for business loans. This could help the FCA to intervene, as it has previously warned that many of the complaints about RBS fall outside its jurisdiction.

The FCA has faced criticism for its handling of the investigation, whichtook four years to complete; RBS argues that all accusations of wrongdoing have been properly investigated and resolved.

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.