The Financial Conduct Authority (FCA) has appointed Promontory Financial Group and Mazars to conduct an independent review into how the Royal Bank of Scotland (RBS) treated business customers who got into financial difficulties.

The move follows the publication of two reports at the end of last year which both contained allegations of poor practice in relation to the bank's treatment of small business customers in particular.

The FCA's review will look at claims raised in a report prepared by Lawrence Tomlinson in his role as Entrepreneur in Residence at the Department for Business, Innovation & Skills (BIS) that RBS had 'systematic and institutional' practices which saw small businesses being pushed towards financial distress to the bank's profit. His publication compiled case studies and examples relating to the treatment of borrowers by RBS' Global Restructuring Group (GRG) which were referenced in Sir Andrew Large's report, the Independent Lending Review and were said to show 'heavy handed, profiteering and abhorrent behaviour.'

The FCA said the first stage of its review will consider RBS' treatment of a sample of customers referred to GRG, including some cases where customers have already raised concerns with Tomlinson, BIS and the FCA, and examine whether any poor practices identified are widespread and systematic. If this is the case, the second stage of the review will identify the root cause of these issues and make recommendations to address any shortcomings.

The FCA says it expects to publish the outcomes from the review in Q3 2014. RBS has already appointed law firm Clifford Chance to conduct an internal review of its conduct in this area.