LLOYDS Banking Group was fined £4.3m by the City watchdog after up to 140,000 customers had their payment protection insurance compensation payments delayed.

The customers were not paid redress within 28 days of receiving a decision letter and nearly 9,000 customers had to wait more than six months for their compensation, the Financial Services Authority (FSA) said.

The failings relate to Lloyds TSB Bank, Lloyds TSB Scotland and Bank of Scotland, leading to a total fine of £4.3m.

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The regulator said it imposed a large fine because Lloyds’ redress payments systems “fell way below the standard the FSA expects”.

Andrew Bailey has been appointed as a deputy governor of the Bank of England, with effect from April 1.

He will also head the bank’s new Prudential Regulation Authority, which will ensure banks and other financial institutions do not take too much risk.

Mr Bailey currently does that job at the Financial Services Authority, but responsibility for such regulation is moving to the Bank of England.

He was previously chief cashier, which meant his signature appeared on notes.