RBS duo in mortgage corruption quiz

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The bankers were allegedly asking foreign estate agents for payments worth tens of thousands of pounds in return for referring customers, the Daily Telegraph said.

Many of the suspected practices have occurred since taxpayers bailed out the banking group last autumn, it is alleged.

Customers from RBS' subsidiaries, including NatWest, Coutts and Adam & Company, are said to have been referred by the two bankers.

Their unit would arrange mortgages for those interested in buying homes on the continent, and the pair would allegedly offer to put people in touch with "trusted" agents to help them find a villa.

The Telegraph said the internal inquiry was being carried out by Chris Nichols, the head of legal matters for RBS international. Chief executive Stephen Hester was also aware, it added.

A spokesman for RBS said: "We take any allegation of fraud very seriously and would always as a matter of course carry out a full investigation into any claims of wrongdoing."

The allegations come as RBS - about 70% owned by the Government - negotiates with the Treasury whether it can break free from a state-backed asset insurance scheme.

The group is reportedly looking to avoid paying a £17.5bn fee for taking part in the scheme by agreeing to absorb the first £60bn of losses on toxic assets insured, rather than the £19.5bn originally agreed.

Rival Lloyds Banking Group is paying £2.5bn to the Government to avoid putting £260 billion of toxic loans - mostly from HBOS - into the Government-backed insurance scheme. It would have raised the taxpayer stake in the group to 62%.