A new Scottish Green Party paper on banking policy calls for RBS's retail operations in Scotland to be transformed into a network of local banks for every region to boost lending to small businesses.

The policy proposes that as Westminster seeks to re-privatise RBS, Scottish ministers should negotiate with the Treasury for the transfer of the domestic banking operations of RBS in Scotland to a Scottish subsidiary. These assets should then be split into a network of banks serving only their local region - a model of banking that is widespread in countries such as Germany.

Earlier this month RBS was heavily criticised for its poor lending to small businesses by an independent review.

Green co-convenor Patrick Harvie will put the proposal to RBS directly today (20th Nov) when their Head of Corporate Banking gives evidence on their lending record to Holyrood's Economy committee.

Patrick Harvie MSP said:

"This is a policy to break the dominance of complex mega-banks and set up a network of local banks to better serve small businesses in every area. The current publicly-owned status of RBS presents a momentous opportunity for Scotland to shape a new model of banking that does more to support local needs.

"Greens want to see a revival of local banking to get more lending going to the thousands of small businesses which form the basis of regional economies. With some bold but achievable action from the Scottish Government, we could take back the initiative from a banking culture that has caused so much economic pain in recent years."