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Royal Bank of Scotland is cutting bonuses for 20,000 senior members of staff in an attempt to avoid further mis-selling which lead to high numbers of customers who had been mis-sold to claim millions from the bank during the PPI scandal.

It will instead offer those who work in NatWest and Royal Bank of Scotland branches as well as those who work in the service and call centre pay rises, which they hope will compensate them for the loss of bonus potential.

Unions have claimed that more financial businesses should follow suit. RBS, which is 74% owned by the tax-payer, has, like its major rivals, been hit by thousands of claims which have cost them well into the millions of pounds for PPI mis-sale and they hope this latest move will stop similar things happening in the future.

However bonuses for the retail staff do not reach the same echelons as those that work in the higher divisions, it is expected to be within the region of about £2,000.

This move follows an announcement last year which stated that teaser rates on things like credit cards in an attempt to become more customer-centric.