RBS has agreed to a reduced fine from the OFT for breaches of competition law.

The Office of Fair Trading (OFT) has fined the Royal Bank of Scotland (RBS) £28.59 million for sharing confidential information with Barclays.

An OFT investigation, following disclosures by Barclays Bank, found that individuals in RBS’s Professional Practices Coverage Team had disclosed pricing information to counterparts at their competitor between October 2007 and March 2008. Barclays was then found to be using the information to determine its own pricing.

The OFT revealed that through the course of a number of telephone conversations and industry events, RBS and Barclays divulged the pricing of loan products to large professional services firms including solicitors and accountancy firms, for which they are the main providers.

As Barclays took the matter to the OFT it will escape without fine despite its involvement, under the OFT’s leniency policy.

The OFT had the authority to fine RBS up to 10% of their worldwide turnover, and initially the levy was £33.6m but this was reduced to reflect RBS’s admission and agreement to cooperate.

Ali Nikpay, Senior Director of Cartels and Criminal Enforcement at the OFT, said: “Any company that discloses confidential future pricing information to its competitors risks a substantial penalty.

“It is important that companies in the UK understand the seriousness of such conduct and ensure effective competitions compliance throughout their organisation.”

The fine has drawn some criticism from the public arena who argue that although a crime has clearly been committed the OFT are actually fining the taxpaying public who own 84% of the bank since a government bailout more than a year ago.

In its most recent annual statement of accounts RBS reported a net attributable loss for 2009 of £3.6 billion, down from £24.3bn in 2008.