Royal Bank of Scotland Group Plc was fined 56 million pounds ($88 million) by British regulators for the 2012 collapse of its computer system that left millions of customers without access to their accounts for weeks.

Britain's largest taxpayer-owned bank will pay the Financial Conduct Authority 42 million pounds and the Bank of England's Prudential Regulation Authority 14 million pounds, the regulators said today. The failure affected 6.5 million customers, about 10 percent of the U.K. population.

"The problems arose due to failures at many levels within the RBS Group to identify and manage the risks which can flow from disruptive IT incidents and the result was that RBS customers were left exposed to these risks," Tracey McDermott, head of enforcement at the FCA, said in a statement. "Modern banking depends on effective, reliable and resilient IT systems."

Chief Executive Officer Ross McEwan, 57, said the bank will invest 750 million pounds over three years to improve the computer system as part of his plan to return the 80 percent taxpayer-owned lender to full private ownership. A series of scandals have overshadowed his efforts, with the bank's Irish unit getting a 3.5 million-euro ($4.3 million) fine this month for the same technology failure.

RBS shares fell 0.9 percent to 380.50 pence at 12:37 p.m. in London. They have increased about 13 percent this year.

'Unacceptable Weaknesses'

"Our IT failure in the summer of 2012 revealed unacceptable weaknesses in our systems and caused significant stress for many of our customers," said Chairman Philip Hampton in a statement. "I again want to apologize to all customers in the U.K. and Ireland that we let down."

The bank said it conducted a "full accountability review" following the incident and cut compensation of 16 individuals including cutting 2012 bonuses and reductions in outstanding unvested awards. It also reduced bonuses for the division overseeing IT services by 18 percent for that year.

RBS's computer system went down in June 2012, after a third-party contractor installed an upgrade to the bank's software. The collapse left customers of the bank and its NatWest and Ulster Bank divisions unable to withdraw or transfer money. The Edinburgh-based lender took more than a week to clear a backlog of transactions.

Fine Discount

RBS got a 30 percent discount from the regulators for settling early. It had faced a 60 million-pound fine by the FCA. The PRA could have penalized the bank 20 million pounds.

This is the first fine levied by the PRA since it was established in April 2013 to oversee the British financial system's stability. The regulator said RBS's technology failure could have had "adverse effects" on the U.K. banking system because it interfered with the lender's core operations and impacted third parties.

"The severe disruption experienced by RBS, NatWest and Ulster Bank in June and July 2012 revealed a very poor legacy of IT resilience and inadequate management of IT risks," Bank of England deputy governor Andrew Bailey said in a statement. Bailey is also chief executive of the PRA.

RBS paid 70.3 million pounds to its customers and 460,000 pounds to other individuals and companies for the system failure. It also docked about 6 million pounds from employees' pay, according to the statement.

Stephen Hester, RBS's CEO at the time of the incident, and Jim Brown, head of Ulster Bank, also waived bonuses for 2012.