RBS suffers IT meltdown as customers are locked out of services said to have made branches obsolete

The problem has persisted since around 5am this morning and the still more than 60 per cent state-owned bank has said it is currently working to resolve the issue.

RBS group has long argued that its controversial strategy of mass branch closures is due to the success of its online services and according to the group’s latest annual report it has 19 million customers in the UK and Republic of Ireland with 5.5 million active mobile app users.

But today the group was forced into the awkward situation of directing customers to its remaining branches and ATMs.

An RBS spokesman said: “We are aware that customers are experiencing issues and are working to fix it”.

He added that: “Customers can still use telephone and ATMs.”

The timing of the problems also come at an embarrassing time for the bank as it follows news last month that it has approached challenger bank Starling for help in developing a digital bank of its own to compete with newcomers to the retail market.

This month RBS revealed plans to close yet more branches, this time another 54 outlets in England and Wales from January with the loss of 258 jobs.

Their closures will mean only about 50 Royal Bank of Scotland-branded branches will be left in England and Wales by next year and come on top of plans announced earlier this year to close 162 branches with the loss of 792 jobs.

RBS’s troubles follow those of TSB earlier this year when its huge IT meltdown led to weeks of pain for customers and the eventual resignation of chief executive Paul Pester.