Ultimate betrayal after UK taxpayers gave RBS £45bn

TO the Royal Bank of Scotland’s employees, and indeed to many other inhabitants of these islands, it seems the ultimate betrayal.

Nine years ago, RBS would have ceased to exist had it not been for the generosity of the British taxpayer, who came to its rescue with a £45 billion bailout plus an array of other state-support mechanisms.

One might have thought this would have caused the people at the top of RBS and its 73 per cent shareholder, HM Treasury, to feel some sense of obligation to their home country and to those who had saved the bank from oblivion.

But despite the bank’s decision to axe most of its international network and refocus its activities on the UK and Irish markets, as well as its avowed intention to become the ‘UK’s number one bank for customer service, trust and advocacy by 2020’, it has in recent years, effectively, been kicking its rescuers in the teeth.

Not only has RBS closed large numbers of branches around the UK, depriving some of its neediest customers of essential services, it has also nearly halved its UK workforce to 57,300 since its own near extinction – with more than 10,000 of those jobs believed to have been transferred to India, where it has been able to recruit people to do the same things on around one-third of the pay.

Rather than prioritise the preservation of jobs and the development of vital skills for the new digital era on its home turf, state-rescued RBS has opted to cull many of its more experienced staff and offshore their work – or ‘migrate’ in the corporate jargon – to its rapidly growing ‘global hubs’ in the Indian cities of Mumbai, Delhi, Chennai, Gurgaon and Bangalore, and, to a lesser extent, in Warsaw, Poland.

As part of a major recruitment drive in India, the bank is effectively draping itself in a promotional sari, practically characterising itself as an Indian institution (it uses the RBS acronym there, not Royal Bank of Scotland) and giving the impression the working day is so relaxed staff can fit in games of table tennis, chess and pool.

It is part of a short-sighted and desperate attempt by management – led by chief executive Ross McEwan – to restore RBS to profitability, but it has little regard to the long-term or even to riskmanagement and controls.

For a start, Indian salaries are rising and the bank will one day find the cost advantages of doing back office work there is wiped out. The main focus of the ‘offshoring’ to date has been back office jobs, some of which involve menial tasks in areas such as IT and loan processing.

However, as with the other Western banks that are prioritising offshoring to India, RBS is also starting to migrate higher-end functions in financial crime checks and anti-money laundering.

RBS’s total staff in India has grown to about 12,500 – more than the 11,000 it employs in Scotland.

In a recent couthy, quite sentimental and patriotic TV advert, aimed at a Scottish audience, the bank claimed it was the ‘Royal Bank FOR Scotland’.

Well, employees who have seen their jobs melt away, customers who have been left without a branch, and business clients who claim their firms were trashed by the bank’s notorious global restructuring group are wondering whether these are hollow words.

Indeed, they are wondering whether the bank actually has any loyalty to Scotland at all.