While his rivals can be wary of the arrangements, Sir Fred said that they are an ideal debt solution, speaking as the RBS announces that it expects decrease in cases of bad debt.
“IVAs are used by people in financial difficulty and no one actually wants to find themselves in financial difficulty,” said Sir Fred.
“What it does do is bring resolution to a problem. Yes, it has grown, but you would expect it to – everything to do with consumer lending has been at record levels.”
His comments come as the RBS and other banks record massive levels of bad debt, whereby consumers cannot repay any loans or debts they have incurred.
While RBS saw a 19 per cent increase in its bad debt charge, it adds that it expects this to decrease to 14 per cent.
While IVAs can form a debt solution, advice is required as Sir Fred said that they need to be carried out properly.