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Government investigates RBS and Lloyds over loan levels

The Government is probing Royal Bank of Scotland and Lloyds to see if the banks are deliberately pricing loans to small and medium-sized business at artificially high levels.

According to the Financial Times, the part-nationalised banks are also being investigated over concerns that they cannot meet the corporate lending targets set for them.

In March, both RBS and Lloyds agreed to lend a total of £39bn to companies and mortgage customers as a condition of entering into the government’s asset protection scheme.

While RBS and Lloyds are both likely to meet the mortgage targets of £9bn and £3bn respectively in the year end to next March, the pair are both unlikely to meet corporate lending targets, which stand at £11bn for Lloyds and £16bn for RBS.

A Treasury spokesman said: “The lending commitments must be met and that is the end of the story.”

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