New data from the Financial Conduct Authority has revealed that banks paid out £306.3 million in compensation relating to mis-sold interest rate swaps in January, almost double the £158.6 million paid in December.

New data from the Financial Conduct Authority has revealed that banks paid out £306.3 million ($499.6 million) in compensation relating to mis-sold interest rate swaps in January, almost double the £158.6 million paid in December.

As of January 2014, there were 9,000 customers in the redress phase, with 7,000 redress determinations completed.

This was a significant increase on December's figures, when 7,500 customers were in the redress phase and 5,200 redress determinations had been completed.

“Redress is now rapidly flowing to small businesses. However, our focus will remain on ensuring that during the decision process affected business owners are treated fairly and that banks remain on course to get their initial offers of compensation out by the end of May," said Clive Adamson, director of supervision at the FCA.

Between 2001 to 2008, banks were selling interest rate hedging products to businesses that aimed to off-set or "hedge" against the future costs of interest charges going up. However, when interest rates fell in 2008, those that had signed up were faced with paying more for their loans.

In 2012, the FCA identified failings in the way that some banks sold interest rate hedging products and in May last year carried out a full review.

The latest figures show the pace of the banks’ reviews is continuing to increase. The banks’ projections for completion of their show that they remain on track to provide a redress determination to all customers within 12 months of starting their reviews.