The Royal Bank of Scotland (RBS) could be made to pay a penalty of $12bn (£9.66bn) or more by the US Department of Justice (DoJ). The penalty is to settle claims over mis-selling residential mortgage-backed securities (RMBS) in the run-up to the 2008 financial crisis.

The figure was revealed by the UK Financial Investments (UKFI) to the Treasury Select Committee on Wednesday, 16 November. UKFI is a limited company mandated by the UK government to manage HM Treasury's shareholdings in banks. It is the body that manages the taxpayers' current 73% stake in RBS.

James Leigh-Pemberton, chairman at UKFI said the potential fine RBS could face in this regard "might be $5bn, it might be $12bn". He added, "Based on what happened to Deutsche Bank it could be more."

Leigh-Pemberton was referring to the recent penalty imposed by the US DoJ on the German lender over a similar mis-selling scandal. Deutsche Bank confirmed in September that the DoJ had asked it to pay $14bn to settle civil claims, related to the issuance and underwriting of RMBS and related securitisation activities during the 2005-2007 period.

The German bank had, however, added that it had no intent to settle those claims anywhere near the number cited. It had also said that the negotiations with the DoJ were just beginning and it expects the penalty amount to be reduced.

With regards to the exact penalty that the DoJ will charge RBS, Leigh-Pemberton said that UKFI did not "have any certainty". Besides, the figures given by it were an assessment of the fine based on market estimates, he said.

Leigh-Pemberton added that the uncertainty over the size of the penalty meant demand from investors to buy the shares of the British bank was "not deep enough to enable a sale in any meaningful size".

According to the Telegraph, negotiations between RBS and the US DoJ over the penalty will start only in 2017. Hence, investor worries about the settlement is said to extend until that time.