Cable claims RBS misused EFG

Vince Cable has claimed that Royal Bank of Scotland misused the government’s Enterprise Finance Guarantee (EFG) scheme, which is aimed at supporting bank lending to small businesses that find it difficult to access credit. Under the EFG scheme, the government backs 75% of the lender’s liability if a customer goes into default. However, RBS admitted that a number of small business borrowers were led to believe they would be backed in the event of a default, rather than the bank. Mr Cable said he was “extremely disappointed” about the way RBS had used the scheme. “I have asked RBS to put the situation right as quickly as possible, so that neither RBS customers nor taxpayers are adversely impacted,” he said.

Source: Financial Times The Independent The Times

We’re unsure what’s more surprising here – the fact that RBS owned up to the potential mis-sale of loans under the EFG scheme following complaints by some customers without being forced into an agreement with the FCA; or that fact that customers honestly believed the security provided by the Government was for their benefit rather than the bank’s. How could a defaulting customer really expect to benefit? Then again how could RBS really allow customers to borrow under that belief? It just beggars, er, belief.

Anyway, credit must be given where it’s due so we admit it’s positive of RBS to publically admit to this latest mis-selling scandal. We wonder how many other banks will follow suit. Or are we to believe that all the other banks behaved impeccably when selling loans under the EFG scheme? We won’t comment on that – we’re too busy watching a pig flying by.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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