The Office of Fair Trading reported that Royal Bank of Scotland (RBS) has been subjected to a penalty charge equal to 28.6 million pounds for disclosure of loan pricing information with its competitor Barclays.

The OFT said some executives of RBS violated competition regulations by disclosing their vis-à-vis at Barclay’s details about how RBS priced its loans to professional services companies. It has been discovered that Barclays made use of the disclosed facts for resetting its own prices, but the bank will not be made to pay the fine because it reported the truth to the OFT.

Ali Nikpay from the OFT said any company that reveals secret pricing details to its rivals incurs the risk of a considerable penalty.

UK companies should realize all the possible consequences of such a breach of law and secure proper competition compliance within their organization.

RBS, 84% government-owned after having been bailed out during the peak of the banking crisis, reported that one of the two executives responsible for the disclosure of valuable information no longer worked in the bank, and the other was waiting for the results of the investigation.

To prevent such undesirable incidents from happening in the future, RBS has teamed up with the OFT and has arranged severe training for its employees.

Barclays stated it notified the OFT in March 2008 when it was discovered that some employees from its banking team had been made a proposal from outside the company.

However, RBS's fine was brought down because the bank admitted violating the law and showed its willingness to cooperate with investigators.

Although the watchdog is empowered to fine organizations up to 10% of their turnover for breaking competition law, it lightens the penalty if a company reports the act of improper conduct.


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