Ex-Bank deputy appointed to scrutinise RBS lending Royal Bank of Scotland has appointed Sir Andrew Large, former deputy governor of the Bank of England, to scrutinise its lending practices as it moves to address criticism that it is not lending enough to small and medium-sized enterprises (SMEs). The bank, which is 82 per cent owned by the government, said the review was intended to find ways of giving more support to SMEs while maintaining "safe and sound" lending practices. The move comes at a time of controversy about whether the drop in lending to SMEs is a result of bankers being too risk-averse, or a lack of demand for credit from companies. Lending to SMEs fell by £452,000 in May despite the government's Funding for Lending Scheme (FLS), the BoE reported this week. Sir Andrew will work with Oliver Wyman, the management consultancy firm he advises, to produce an independent review of RBS's lending practices by the autumn. He will examine the bank's lending standards, its appetite and capacity to provide loans and any changes in the structure of its loan book over the past five years. "There is a disconnect between what the bank says it is doing on lending, and what many businesses say they experience on the ground," said Sir Andrew. RBS has long maintained that it is lending as much as it can and is constrained only by demand. Stephen Hester, who was ousted as chief executive last month, recently said that RBS had £20bn of surplus deposits that it could not lend out because of a lack of confidence among businesses customers. The bank said the review will attempt to find ways in which the bank could work harder to lend to businesses, such as not being too strict with first-time loan applicants. RBS promised to "throw open" its books, and provide Sir Andrew and Oliver Wyman with access to its business customers and staff, as well as its lending data. It is the UK's biggest lender to SMEs, with a market share of 24 per cent, but says it accounts for 35 per cent of SME loans and outstanding overdraft balances. Sir Andrew was deputy governor of the Bank of England from 2002 until 2006 and also previously held the position of deputy chairman of Barclays. He currently advises governments around the world on financial stability issues and works as a senior adviser with Oliver Wyman. The UK government has ratcheted up its involvement in RBS in recent weeks. Chancellor George Osborne has promised to launch an "urgent investigation" into whether RBS should be split into "good" and "bad" banks. This would see up to £130bn of its worst loans hived off into a separate unit, leaving the "good" part of the bank to focus on lending.