RBS Irish unit fined $2.5 million over capital rules

The Irish Central Bank has fined Royal Bank of Scotland's Irish unit 2 million euros ($2.5 million) over violations relating to the management of liquidity risk and capital adequacy last year.

The central bank said in a statement that Ulster Bank failed to apply the correct haircuts to four categories of retail and corporate deposits.

It also failed to maintain effective internal controls for the management of liquidity risk and excluded certain cash inflows from the calculation of its liquidity position.

Ulster bank said the violations, which took place between January 26 and September 13, 2011, had not affected customers. The central bank said it considered the issue was now closed.

The fine related to a shortfall in the bank's Pillar II capital requirements, used to balance risks over and above those relating to credit, market and operations risks.

Ulster Bank said in a statement that it had since implemented "a number of robust measures to ensure similar contraventions are not repeated." ($1 = 0.7871 euros)

(Reporting by Conor Humphries; Editing by David Cowell)