RBS could face criminal probe in wake of SME allegations

Embattled RBS could face a criminal investigation, as news comes that the Serious Fraud Office (SFO) may be planning one, following government adviser Lawrence Tomlinson's claim that the bank forced small and medium-sized businesses into difficulties in order to make a profit from stripped assets.

According to five unnamed sources cited by the FT, the SFO has held interviews with former company executives affected by the lender's Global Restructuring Group, which manages its riskier loans.

"The only thing we're saying is that we're aware of the issue and we are monitoring developments", a spokeswoman for the SFO said.

On Monday, RBS appointed lawyers from Clifford Chance to conduct an inquiry into the allegations, after accepting recommendations made by government-appointed Andrew Large in a damning independent report into the bank's actions.

Bank of England governor Mark Carney said it was "shocking" that RBS's treatment of businesses was not recognised sooner. Carney went on to say that, whilst it is the responsibility of City watchdog the Financial Conduct Authority to initiate an investigation, rather than the Bank, he believes the matter must be pursued "to the fullest extent of the law".