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UK FCA initiates probe into RBS’s IT failures

The UK Financial Conduct Authority (FCA) has formally initiated a probe against the Royal Bank of Scotland (RBS) over IT failures during June 2012, which affected several millions of customers.

The banking group, which holds nearly 17 million business and personal accounts, said that problem surfaced when an error in software assisting to run payments caused the rest of the payment program to break down.

Due to this IT problem, the bank’s customers including RBS, Natwest and Ulster Bank, were unable to execute the banking transactions for up to three weeks.

In a statement FCA said, "The Financial Conduct Authority has started to conduct an enforcement investigation into the IT failures at RBS which affected the bank’s customers in June and July 2012."

"The FCA will reach its conclusions in due course and will decide whether or not enforcement action should follow that investigation."

RBS had earlier said, "Last summer’s IT failure was unacceptable. We have already made significant improvements and over the next three years will invest hundreds of millions in our systems."

"We will be working closely with our regulators in the UK and the Republic of Ireland. Our customers deserve a service they can rely on 100 per cent of the time and that’s what we want to provide."

The 82% UK government-owned bank was criticized for repeated IT problems, although the lender claimed that it has already paid £175m to its affected customers.