Our Story
We are one of the oldest banks in the UK and our extraordinary heritage also encompasses the histories of hundreds of constituent companies.
1727 to 1745
- Origins in national tragedy
- In the 1690s a group of investors tried to set up a Scottish trading colony at Darien (modern day Panama). The venture was a terrible failure, costing Scotland 2,000 lives and a quarter of her entire liquid wealth. Partly because of these losses, Scotland accepted political union with England to form Great Britain in 1707.
- A bank is born
- One of the terms of the Acts of Union called for compensation to be paid to Scots for the money they had lost. A company was formed to manage the payments, and it soon found that it had spare money to invest. Its directors had the idea of starting a bank, and petitioned King George I for his approval. In 1727 a royal charter was granted, establishing The Royal Bank of Scotland.
- Early rivalry
- In our early years, we were in fierce competition with our older rival Bank of Scotland. Each tried to bankrupt the other by hoarding and then presenting for payment large quantities of its opponent's banknotes. Neither succeeded in inflicting a fatal blow, however, and eventually both sides had to accept the permanent presence of competition.
- Danger on the doorstep
- Greater threats faced us in 1745, when an armed Jacobite uprising challenged King George II's right to the throne. The Jacobites - who believed Bonnie Prince Charlie was the rightful King - gathered together to form an army and attempt to take the throne by force. On their march southwards, they occupied the city of Edinburgh. Anticipating a time of danger and upheaval, we moved our money and most precious records into Edinburgh Castle for safekeeping.
- Payment to a prince
- When the Jacobites arrived in the city, Bonnie Prince Charlie demanded payment from us for a large quantity of Royal Bank notes. This money funded the Jacobites' march on into England until they were turned back at Derby in the English Midlands. From there, they retreated back to their Scottish heartland, where their rising came to a bloody end on the battlefield at Culloden. A dangerous episode in our early history was over.
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- How old is the Royal Bank?
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The Royal Bank of Scotland itself was established by royal charter on 31 May 1727. Some of our constituent businesses are even older, dating back as far as the 1580s. You can learn more about them at RBS Heritage On-line.
- Is it true that Scottish banknotes are not legal tender?
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Yes, it is - but Bank of England notes aren't legal tender in Scotland either. Officially, the phrase 'legal tender' means money that a person is obliged to accept if offered it in payment of a debt. Under Scottish law, that does not include banknotes, which are classified as 'legal currency' but not 'legal tender'.
The only historical exception was during the two world wars, when as a temporary measure the government made banknotes legal tender in Scotland, as a way of reinforcing people’s trust in them. This was important in a time of shortages, when the government needed to be sure that people would not hoard gold.
