Bank of England governor Mark Carney said allegations that RBS drove some small businesses to collapse should be investigated “to the fullest extent of the law”.
Mr Carney said the Financial Conduct Authority had been informed of the claims, which were contained in a report compiled by Business Secretary Vince Cable’s adviser Lawrence Tomlinson.
The document alleges RBS put otherwise viable firms into danger in order to buy back their assets at rock-bottom prices.
Mr Carney told the Treasury Select Committee the claims were “deeply troubling and extremely serious”, and said the FCA had direct responsibility to conduct an appropriate investigation.
“This has to be tracked down to the fullest extent of the law”, Mr Carney said.
The governor also dismissed a suggestion that “predatory restructuring” of businesses could be a consequence of rules obliging banks to increase the ratio of capital they hold.
“This behaviour is a fundamental violation of the banking relationship,” he said.
Pressed on whether such practices should have been picked up earlier by regulators or within RBS, he said: “If these activities proceeded on any sort of scale, I think it is remarkable.
“It is shocking.”
The exchange came during a combative session with the TSC in which Mr Carney was also forced to mount a robust defence of his forward guidance policy
The guidance pledges that policy-makers will not consider raising rates above 0.5% before unemployment falls to 7%, but uncertainty over when that is likely to happen has drawn criticism.
The Bank’s latest forecast brought forward the date at which the threshold was on balance likely to be achieved by nine months, but Mr Carney subsequently made it clear that the Bank was in no rush to increase rates even when it is met.
The governor sharply rebuked Conservative MP Brooks Newmark when he suggested the guidance policy had damaged the Bank’s credibility, replying: “that is a total failure of logic”.
Mr Carney was also challenged over his recent description of the current state of the UK, which figures show is growing faster than all other major economies but in many cases from a weaker base.