Royal Bank of Scotland is to be hit with £50m of fines on Thursday after the collapse its computer systems in 2012, which left millions of customers shut out of their accounts for several days.
In the latest embarrassment for the bailed-out bank, the penalty comes barely a week after it was fined £400m for failures that allowed the foreign exchange markets to be rigged for five years until 2013.
The fines were prompted by the chaos caused when a problem with the bank’s IT system left customers unable to access their cash at RBS, NatWest and Ulster Bank in June 2012.
The meltdown hit not only customers of the three brands owned by the bank, but also people who were expecting salary payments from businesses that held accounts with the bank and other transfers between banks.
RBS has previously described the breakdown in its IT system as unacceptable and vowed to spend £1bn upgrading its computer systems.
The problem emerged when a routine procedure failed to be complete. But it took days for RBS to correct the problem for customers at RBS and NatWest, and several weeks at Ulster Bank.
The Irish authorities fined RBS £2.7m last week for the Ulster Bank problems.
RBS put aside £175m to compensate customers after the incident and has said no one has been left out of pocket as a result.
The fines come at a time when the banking sector is facing renewed scrutiny after the punishments for foreign exchange rigging.
Those investigations exposed a series of online chatroom dialogues, where dealers called themselves “the A team” and “the three musketeers”.
RBS was one of six banks fined a total of £2.6bn for allowing manipulation of the foreign exchange markets and the bank is expected to face further fines – not only related to currency markets but also to matters dating back to the sub-prime mortgage crisis in 2007.
The bank has already been fined for rigging Libor, and earlier this year was fined £14.5m in relation to its sale of mortgage products.
The latest fines are to be handed out by the City regulator, the Financial Conduct Authority (FCA), as well as the Bank of England’s new regulatory body the Prudential Regulation Authority (PRA). The fine from the PRA is expected to be smaller than that from the FCA but will be the first it has handed out since it was set up by the coalition to oversee the biggest banks and insurance companies.
The PRA’s fine will be for issues that may have caused a threat to the stability of the financial system, while the FCA will tackle issues that had an impact on customers.
No one from RBS, the PRA or the FCA would comment on Wednesday.
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