RBS computer failure 'caused by inexperienced operative in India' - Telegraph.co.uk

He said: "The IT centre in Edinburgh is our main centre, it is nothing to do with overseas. Things go wrong. Things go wrong in technology.

"We have to learn the lessons from what went wrong here and try to make then less likely to happen in the future."

The error is understood to have occurred after a software update froze part of the banks' computer systems last Wednesday, affecting 17 million customers.

Although the problem was resolved on Friday, it created a backlog of more than 100 million transactions that were not paid in or out of bank accounts as they should have been.

Deleted information then had to be painstakingly re-entered into the bank group's computer system.

A source, who worked for RBS for "several years", told the Register an "inexperienced operative" had made an error while performing the relatively routine task of backing out of an upgrade.

He said: "When they did the back-out, a major error was made. An inexperienced person cleared the whole queue ... they erased all the scheduling."

RBS have not yet commented on the claims.

The bank has already promised customers will be reimbursed for the cost of fines or late payment fees incurred as a result of the delays. Banking experts said that the cost to RBS of dealing with the IT problems, including extra staff costs as well as the money to reimburse customers, is already likely to be between £50 million and £100 million.

Mr Hester has also admitted that the bonuses of senior members of RBS staff are likely to be reduced because of the incident.

He said: "All of us are judged in part by customer service, from me on downwards. And we should be."

Earlier this year Mr Hester was forced to waive a share bonus worth £963,000 after a public outcry and political pressure.

The Financial Services Authority said: "We will expect RBS-NatWest to provide us with a complete account of the issues once this is fully resolved and to take any necessary steps to ensure that the risks of these problems occurring again are addressed."