The Royal Bank of Scotland has agreed to pay a fine of £28.59m after admitting breaches of competition law by disclosing pricing information to its rival Barclays Bank between October 2007 and March 2008.

The agreement follows an OFT investigation where it was found that individuals in RBS’s Professional Practices Coverage Team had unilaterally disclosed generic and specific confidential future pricing information about loan products to their counterparts at Barclays Bank, and that Barclays had taken the information into account when setting their own prices. RBS also supplied specific confidential future pricing information relating to two proposed loan facilities.

The disclosures took place on the fringes of social, client, or industry events or through telephone conversations and touched on loans to large accountancy firms, among a range of other professional services firms, in respect of which Barclays and RBS are the main providers.

The matter was brought to the OFT’s attention by Barclays under the OFT’s leniency policy. As the first undertaking to report its participation in the infringement, Barclays will qualify for immunity from any fines, provided that it continues to cooperate with the OFT.

RBS’ fine was reduced from £33.6m to reflect RBS’ admission of the breach and agreement to co-operate during the OFT investigation.

This case illustrates the OFT’s commitment to protecting competition in the financial services sector and that competitors which exchange confidential future pricing information risk incurring large penalties.