The Financial Conduct Authority has kicked off its independent review of Royal Bank of Scotland's treatment of business customers in financial difficulty by appointing the Promontory Financial Group and Mazars to conduct the report.
The regulator confirmed in a statement that the two groups will conduct an independent skilled persons report under section 166 of the Financial Services and Markets Act (FSMA) 2000 which will examine RBS's treatment of business customers in financial difficulty.
It will also consider allegations of poor practice set out in the report by Dr Lawrence Tomlinson and referenced in Sir Andrew Large's report.
"We welcome confirmation of the FCA's review and will support the process in every way we can," said RBS Head of Conduct and Regulatory Affairs Jon Pain in a statement to IBTimes UK.
"The full investigation of these issues is vital in order to protect the trust our customers place in us.
"In addition to the FCA review RBS has commissioned the law firm Clifford Chance to conduct a further independent investigation into these issues.
"Any customer with concerns about their experience with GRG can contact Clifford Chance to have their case examined."
Where it Began
At the end of November last year, the FCA has asked a number of banks to confirm that they have not engaged in similar practices to those allegedly followed by RBS in which businesses were engineered into default while the firm profited from them.
Lawrence Tomlinson, an adviser to Britain's business secretary Vince Cable, claimed that RBS pushed businesses into default after moving them into its Global Restructuring Group (GRG).
He added that the 81% government-owned RBS also profited from their struggles as by moving them into GRG, this can create more revenue for the bank through higher fees and margins.
It can also result in the purchase of devalued assets by its property division, West Register.
Tomlinson runs LNT Group, based in the north of England which has annual revenue of £100m and has interests in construction, software, car manufacturing, and care homes.
After the release of Tomlinson's report, RBS drafted in heavyweight lawyers to review the treatment of small-to-medium sized enterprises (SME) and denied wrongdoing.
RBS's newly installed chief executive, Ross McEwan, said the bank appointed Clifford Chance to help its inquiry into the treatment received by SMEs in financial distress.
"To ensure our customers can have full confidence in our commitment to them I have asked the law firm, Clifford Chance, to conduct an inquiry into this matter, reporting back to me in the new year," said McEwan.
The FCA said the first stage of the review will consider RBS' treatment of a sample of customers referred to its GRG.
This will include some cases where customers have already raised concerns with Tomlinson, the Department of Business, Innovation and Skills, and the FCA.
The review will also consider whether any poor practices identified are widespread and systematic.
If this is the case, the second stage of the review will identify the root cause of these issues and make recommendations to address any shortcomings identified.
The watchdog said that it expects to publish the outcomes from the review in the third quarter of 2014.