Major bank admits errors over £900m scheme

Major bank admits errors over £900m scheme




High street bank, Royal Bank of Scotland (RBS), has launched a review of its Enterprise Finance Guarantee (EFG) scheme after admitting that some customers were not given proper explanations… .

High street bank, Royal Bank of Scotland (RBS), has launched a review of its Enterprise Finance Guarantee (EFG) scheme after admitting that some customers were not given proper explanations.

The EFG scheme is a government lending initiative intended for small business which lack security for mainstream lending, but do have feasible business proposals. RBS has lent over £900 million to 9,000 small businesses in the UK.

After discussions with the British Business Bank – the scheme’s manager, RBS decided to review its use of the scheme and after a number of cases were found to have featured insufficient services from the bank.

These cases saw the bank fail to sufficiently explain the scheme’s use of borrower and guarantor liabilities to customers.

CEO of Commercial and Private Banking, Alison Rose, said the firm is doing its upmost to rectify the issue. “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,” she said.

“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.”

RBS said it remains supportive of the EFG scheme, which allows it to lend to thousands of businesses who would usually be unable to access finance. Alison has expressed how important the scheme is to the bank.

“EFG is a hugely important scheme that has helped many businesses continue to trade today,” she said.

“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.”

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