The state-backed bank said on Wednesday it had made an additional provision of 600-900 million pounds, on top of the 5.3 billion pounds already set aside, after claims received in August exceeded expectations.

The news gives credence to recent comments by industry experts that Britain's most costly consumer banking scandal could yet have a sting in the tail even after an August 29 compensation deadline.

British banks have so far paid out more than 36 billion pounds to consumers eight years after it first emerged they were missold the loans insurance on a vast scale.

PPI policies were sold alongside a personal loan or mortgage to cover repayments if borrowers fell ill or lost jobs but most were sold unsuitable policies and would never have been able to claim.

RBS said 4.9 billion pounds of its total provisions has already been utilised.

UK consumers had been bombarded with commercials and advertisements pushing them to make last minute PPI claims to their banks.

One such campaign was financed by Britain's banking regulator, the Financial Conduct Authority and fronted by U.S. actor-turned-politician Arnold Schwarzenegger.

RBS's fresh provision will be reflected in the third quarter results, the bank said, adding that the processing of PPI claims were ongoing and the ultimate provision recognised could be above or below the 600-900 million pounds range.