Regulators in the UK have accused the Lloyds Banking Group of operating a toxic culture that lead to miss-selling by its employees in order to avoid demotions and achieve targets.

The regulator fined the bank a record £28 million for operating a toxic culture which forced one of the salesmen to sell policies to himself, his wife and a colleague for avoiding demotion. The employee was concerned that his salary would fall from £34,000 to £26,000 if he is demoted one grade. This is about 23 per cent pay cut for a middle-ranking adviser in the banking giant, which put immense pressure eon the working of the bank staff.

The employee was forced to sell assurance, critical illness and expenses on death cover to himself, to his wife even as they could not afford the premiums for the polices. He also sold a critical illness policy to an office colleague but the policy was cancelled. The sale was finalised in the final week of one of the bank's quarters. The banks had an automatic demotion process during it was under investigation from 2010 to 2012.

The Financial Conduct Authority said that the bank did not check for bad sales after each quarter.