Banks target of price-fixing raid

The investigation is related to professional services

Royal Bank of Scotland and Barclays have been raided by the Office of Fair Trading (OFT) regarding possible price-fixing.

The OFT said it had launched an investigation into alleged anti-competitive practices.

The investigation concerns loans made to professional services companies, such as law and accountancy firms.

The OFT said the investigation was in its early stages and had a narrow focus, being limited to two parties.

"The OFT will not be in a position to conclude whether the law has in fact been infringed until it has completed its investigation and assessed the available evidence," the consumer watchdog said.

Investigators searched the head offices of the two firms in London and Edinburgh in connection with the probe.

Borrowing by professional services firms only makes up a small part of banks' commercial lending, especially when compared with industries such as construction.

'Inappropriate manner'

Barclays said it notified the OFT on 17 March that certain members of its professional services team had been approached from outside Barclays "in a manner which we regarded as inappropriate".

RBS said it was co-operating fully with the regulator.

Barclays also confirmed it had made a so-called "leniency application" to the OFT in March, in which the bank volunteers information in return for a lower penalty, if any is imposed.

UK banks have also come under OFT scrutiny regarding overdraft fees.

The regulator is challenging the overdraft fees of eight banks, including Barclays and RBS, in a High Court lawsuit.