Stephen Hester, CEO of Royal bank of Scotland (RBS) will not take a bonus for 2012, following the computer software and systems glitch that left many Natwest customers without access to their money.
The decision also follows widespread reports that RBS, which is 83 percent owned by the taxpayer, is set to be fined about £150m by the Financial Services Authority (FSA) for participating in manipulating two of the most important interest rates in the global financial markets and the bank being proven guilty of mis-selling derivatives to retail customers.
The move by Hester echoes Barclays CEO Bob Diamond announcement that he and three of the UK bank's most senior executives will reject their bonuses this year after the regulators in the US and the UK fined the group a record £290m for manipulating the London Interbank Offered Rate (LIBOR) and the Euro Interbank Offered Rate (EURIBOR).
Hester admitted banking culture needs to change, by saying "[bankers] thought they were masters of the universe, when they should have been servants of the customer."
However, he said he could not comment on the Libor fixing scandal because the investigation was still on-going.
RBS In the Docks
Today, the IBTimes UK revealed that RBS' senior staff conspired to fix the key interest rate Libor between at least 2007 to 2011, according to a former head trader in a court filing.
In the court papers filed in New York and with the Singapore High Court, Tan Chi Min, the former head of delta trading for RBS's global banking and markets division in Singapore, alleged that managers condoned its staff to set the Libor rate artificially high or low to maximise profits.
Tan was sacked for gross misconduct from RBS in November 2011 because, he claims, he was made a "scapegoat" for malpractice condoned by managers.
He is currently suing for wrongful dismissal and within the claim, he names five staff members that he alleges, made requests for the Libor rate to be altered and subsequently, three senior managers knew the situation while the practice 'was known to other members of [RBS]'s senior management'.
The filings implicate RBS into allegedly joining Barclays, Lloyds andHSBC in deliberately distorting financial data used to set interest rates on millions of loans and other transactions.
Tan added that hedge fund managers Brevan Howard were also involved with the Libor fixing scandal and he had received the request in 2007 from the group to fix rates.
"Brevan Howard telephoned on 20 Aug 2007 to ask the defendant to change the Libor rate," according to a paper filed with the Singapore High Court and the court filing alleges RBS "received this request without objection".
RBS, which is 83 percent owned by the taxpayer, is set to be fined about £150m for participating in manipulating two of the most important interest rates in the global financial markets that was proven to be engaged in by Barclays, said a report in the Times newspaper.
In the wake of RBS said it is continuing to co-operate with regulators on the ongoing investigation, as 17 banks and 1 broker are being investigated by regulators over rigging rates claims.
RBS declined to comment on the case and reports when IBTimes UK contacted the bank.