Royal Bank of Scotland paid contractors £400 a day to stuff envelopes, wasting thousands of taxpayers’ money.
The lender is still 62% owned by the Government, and paid £330 a day plus VAT to individuals for them to carry out tasks such as sending PPI letters to customers.
The money was paid during parts of 2017 and 2018 at an office in Manchester, The Press Association found.
Those working on the project told PA that they had been hired as specialists, but management disorganisation had left them putting letters in envelopes.
"It is purely because they have no organisational skills on the project we were on and was a complete waste of taxpayers' money," said one contractor who worked on the project, speaking on condition of anonymity.
£50 billion of losses
Typical envelope-stuffing jobs are paid at the minimum wage, meaning taxpayers have lost out to the tune of thousands of pounds, although the exact figure is unknown as RBS has not disclosed the total number of people receiving the bumper pay rate.
In its defence of the wage, RBS said in a statement: "We do not hire contractors at this rate to do this type of work. When we employ contractors, they are paid in line with industry rates according to their experience and skills.
"There have been a limited number of occasions when we have used short-term support from other areas of our business to ensure we are delivering on time and in line with our commitments for our customers."
RBS has made more than £50 billion of losses since it was handed a £45 billion state bailout at the height of the financial crisis in 2008.