RBS Image: Royal Bank of Scotland plc

The Royal Bank of Scotland (RBS) has said it will scrap sales bonuses for its 20,000 retail banking staff.

The bank said it hopes the move will reduce pressure on staff to sell products. Instead of bonuses, staff will receive a 5% pay rise. RBS believes this system will be simpler and fairer to staff and customers. It means staff at smaller, quieter branches will not earn less than colleagues in busier branches just because of their location.

Les Matheson, head of personal and business banking at NatWest and RBS, said: "We're determined to keep doing things differently and we can only continue to rebuild our customers' trust if they truly believe that we are completely focused on helping them with their financial needs - which is why we will scrap all incentives for customer-facing employees."

RBS says it is the first major bank in the UK to take such a step.

The financial crisis and the ongoing PPI scandal have resulted in a lot of anger and frustration towards bankers, and the banks when they pay larger bonuses. But the scrapping of bonuses does not apply to RBS' investment banking division, which is where the losses were made that led to the bank being bailed out by the government.