A REPORT into the activities of a controversial unit set up by Royal Bank of Scotland (RBS) to help struggling small and medium-sized enterprises (SMEs) has been described as a “whitewash” by a legal firm seeking redress for affected owners.

It comes after watchdog the Financial Conduct Authority (FCA) said it may take “further action” over the way RBS treated some of its small business customers.

The FCA yesterday published an interim report into the treatment of small businesses that were shifted into RBS’s Global Restructuring Group (GRG). It identified a number of failings at RBS, but said the bank had not engaged in “systematic inappropriate treatment of customers”.

In a statement, FCA chief executive Andrew Bailey said: “Commercial lending activity is largely unregulated in the UK but given the seriousness of the allegations against RBS it was appropriate for us to look at their treatment of SME customers.

“As we reported in November 2016, while the most serious allegations were not upheld by the skilled person [carrying out the review], the report did identify other concerns about the treatment of SME customers.

“RBS has accepted that it did not meet the standards it set for itself which impacted on how it treated some of its SME customers.

“RBS has since taken voluntary steps, such as its proactive review of complex fees, and setting up a complaints scheme for eligible SME customers, overseen by an independent monitor, Sir William Blackburne.

“We are investigating the matters arising from the Skilled Person’s Report and are focusing on whether there is any basis for further action within our powers. We cannot comment any further on this.”

However, RGL Management, a legal group set up to represent business people affected by the GRG’s activities, dismissed the report.

CEO James Hayward told The National: “We have always said that the FCA report will be a whitewash and that now looks to be the case.

“From what we understand, the FCA has failed to acknowledge the serious and deliberate harm caused to businesses through RBS’s Global Restructuring Group. The FCA is making excuses in its interim report as to why it cannot bring the bank to justice, which does nothing to help redress the devastation inflicted on business owners by RBS. If the FCA cannot, or will not, take action against the bank then it is important for distressed businesses and individuals to seek justice in the courts.”

The FCA has refused to publish the entire report, despite it having been seen by TV personality Noel Edmonds, who said its contents would sink RBS. But Daniel Fallows, from Seneca Banking Consultants, which also represents affected businesses, said they still wanted full disclosure.

“Businesses crippled by the division are not looking for a second summary – they are looking for closure, which means that the report which has been kept under lock and key has to be published,” he said.

“Royal Bank of Scotland are hiding from their biggest scandal to date, including the shocking findings which were revealed in the leaked report earlier this year. We are calling for RBS to release the report and compensate those businesses which were crushed by the Global Restructuring Group.”

However, RBS chief executive Ross McEwan said the “most serious allegations made against the bank have not been upheld”.

He said: “The regulator has again confirmed that the remediation steps we announced in November to address concerns for customers are appropriate. The culture, structure and way RBS operates today have all changed fundamentally since the period under review. We have made significant changes to deal with the issues of the past, so that the bank can better support SME customers in financial difficulty whilst also protecting the bank’s capital.”