Royal Bank of Scotland is the subject of controversy over the results of a landmark rights issue while the former chief executive of
Barclays, John Varley, is being probed over payments to a Qatar sovereign wealth fund, media reports said.

The RBoS Shareholders
Action Group, plans to sue RBS and its former chief executive Fred
Goodwin, as well as former chairman, Tom McKillop, and the former
investment bank chief Johnny Cameron for allegedly misleading investors at the
time of a landmark £12 billion rights issue in 2008.

The shareholders lost nine-tenths of their money after
buying shares in the ill-fated rights issue at an adjusted £20 each, but
the shares now trade at around £225 each.

The shareholders allege that they were misled by omissions
in the prospectus which concealed the frailty of the bank, which was bailed out
by the British government during the 2008 financial crisis.

A few days ago, it was reported that RBS is being
investigated for possible breaches of US sanctions against Iran. The
Federal Reserve and Department of Justice are carrying out the probe. The
investigation comes after RBS, parent firm to private bank Coutts, volunteered
information to US and UK
regulators 18 months ago, reports said. The US authorities are examining a number
of banks for possible sanctions violations.

Barclays

Meanwhile, Varley, former Barclays CEO,
is at the centre of a regulatory inquiry into unorthodox payments to Qatar's
sovereign wealth fund, according to a report in the Sunday Telegraph newspaper.

The report said Varley was one of the four current or former
executives whom the Financial Services Authority, the UK financial
regulator, is investigating over "advisory fees" paid by the bank to
Qatar Holding in 2008.

The payments were linked to the sovereign wealth fund's
participation in an £11 billion refinancing of the UK bank at the height of the
financial crisis.

Reports said the FSA and Barclays declined to comment.

Barclays confirmed last week the launch of a criminal probe
into payments between Barclays and Qatar Holding. It said on Wednesday that the
UK's Serious Fraud Office
(SFO) had started an investigation into "payments under certain commercial
agreements" between it and Qatar.