By Jonathan Davies
Royal Bank of Scotland (RBS) has admitted to mis-selling £900m worth of loans to more than 9,000 small businesses.
The loans were sold under a taxpayer-backed scheme called the Enterprise Finance Guarantee (EFG). But RBS was found not to have properly explained the scheme to the 9,000 small businesses.
EFG was set up in 2009 to help small businesses that struggle to gain finance. As a taxpayer-backed scheme, RBS, which is 80% owned by the taxpayer, is the biggest user of the scheme.
After a number of complaints were made to the British Business Bank, which oversees the scheme, RBS reviewed files of loans sold under the scheme.
The bank said it had "identified a number of instances where we have not properly explained to customers how borrower and guarantor liabilities work under the EFG scheme".
RBS will now conduct a "thorough and proactive review of affected and potentially affected customers to ensure they are put back in the position they believed they would have been in".
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