Bank hit with its sixth penalty in four years, showing it is still far from being in proper shape to return to the private sector

Here's the ABC of running a mortgage business: first, design a decent loan product; second, make sure the sales force understand it and can talk sensibly to customers about it; and third, have the systems in place to process it.

RBS (largely through its NatWest brand) catastrophically failed on the second and the third points, and is probably quite lucky the fine was just £14.5m. This is the sixth time the bank has been fined in the past four years, and it comes after internal reviews identified the failings long before they were rectified.

Numerous failings were first discovered by the Financial Conduct Authority (FCA) between September and October 2011. In 2012, mystery shopping by the FCA found problems in every single case it reviewed. Only two of 164 sales between June 2011 and March 2013 met full FCA standards.

Advisers made some pretty basic omissions. They failed to determine if the customers could afford the mortgages being recommended to them. RBS NatWest relied on algorithms based on Office for National Statistics data to establish potential borrowers' expenditure. They could just have asked them instead, or required evidence of their spending. Meanwhile, the advisers were free to speculate about future interest rate rises (rather a crucial matter when advising on mortgages) with little or no central guidance.

This is a bank that has struggled time and again with IT and computer issues. Few customers will forget how, in June 2012, RBS's systems went into meltdown as a failed software update spiralled out of control. It turns out that some of the mortgage failings leading to Wednesday's fine are down to inadequate IT systems. When inputting answers to "fact find" questions, the advisers were limited to 500 characters by the bank's IT system.

Does this matter much? In some ways, no. Even the FCA admits that the consumer detriment from these failings was limited. But along with data from moneysavingexpert.com on Wednesday, which rated RBS a pitiable 13th out of 14 banks in the UK for service, it adds to a sense that the bank is still far from being in proper shape to return to the private sector.