The FSA says it found "multiple failings" in the way the pair handled complaints from customers, responding inadequately to more than half the reviewed cases.

Failures related to delays in responding to customers, poor quality investigations and inadequate explanations for upholding or rejecting complaints.

Of the complaint files reviewed by the watchdog, 53% showed deficient handling; 62% a failure to comply with FSA requirements on timeliness and disclosure of Ombudsman referral rights; and 31% failed to demonstrate fair outcomes for consumers.

The poor service was a consequence of inadequate training and guidance for relevant staff as well as weak monitoring.

The shoddy service was uncovered during a recent industry-wide FSA review of complaint handling which has already seen five banks move to revamp their processes.

The review was followed up in September by a consultation paper aimed at shaking up the rules covering how banks deal with the more than 7000 gripes lodged every day.

At the time, the FSA revealed that RBS generated around 140,000 complaints in the first half of 2010 - considerably less than Lloyds Banking Group (288,717) and Barclays and Santander (both around 250,000)

Margaret Cole, MD, enforcement and financial crime, FSA, says: "We expect firms to treat customers fairly and that consumers can be confident that their complaints will be dealt with properly. The failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk and the fine of £2.8m reflects this."

RBS and NatWest cooperated with the investigation, accepting the findings early in the process and agreeing to make major changes, gaining a 30% reduction in the fine.