Watchdog fines RBS £28m following loan-rates disclosure

The part-nationalised bank was hit with the penalty following a two-year investigation by the Office of Fair Trading (OFT) after Barclays came forward in March 2008.

The duo in the RBS professional practices team told its rival the cost of loans to firms such as solicitors and accountants between October 2007 and February or March 2008.

The bank, which owns NatWest and is 84 per cent owned by the taxpayer, said the behaviour of its staff was "unacceptable".

One of the employees involved has since left – although the other still works for RBS and now faces suspension and further investigation. The breaches investigated by the OFT date from the early stages of the credit crunch, when former boss Sir Fred Goodwin was still running RBS and lenders were tightening up terms for borrowers but the fine comes at a time when banks face public anger over starving firms of credit in the recession and the lingering bonus culture in the industry.

Ali Nikpay, the OFT's senior director of cartels and criminal enforcement, said: "Any company that discloses confidential future pricing information to its competitors risks a substantial penalty."

RBS had its fine reduced from an original 33.6m by agreeing to co-operate with the OFT. Barclays approached the OFT over the breaches in March 2008 and will avoid sanctions under leniency rules.

As well as general details of loan pricing, RBS also disclosed specific confidential details on the cost of two facilities it intended to offer.

The OFT added that it had "found evidence that the information was

taken into account by Barclays in determining its own pricing".

Mr Nikpay added: "It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation.

"This case underlines the OFT's commitment to protecting competition in the financial services sector."

An RBS spokesman said: "This is a deeply regrettable and isolated case from nearly two years ago, involving only two members of staff, one of whom has left the bank and one other who faces suspension and further investigation now the case has been settled."

It had co-operated fully and introduced training to ensure

this "unacceptable behaviour" did not happen again.

Barclays said it voluntarily notified the OFT that members of its professional services team were approached from outside Barclays inappropriately.