In the wake of the bank’s £1.5bn capital shortfall, the Financial Conduct Authority (FCA) is investigating whether there is enough evidence to take action against former directors, including Rev. Paul Flowers, the ex-chairman, according to the Telegraph.

The action could lead to lifetime City bans or sizeable fines were any wrongdoing to be proven.

The regulator, led by chief executive Martin Wheatley, (pictured) is believed to be focusing on the actions of individuals in the run-up to the shortfall being uncovered in June 2013.

Central to the probe is whether there were any regulatory breaches by the directors in relation to the regulatory capital position of the bank and the way that provisions were accounted for in relation to loan impairments.

It is thought that the probe is looking at members of the bank’s management team, led by interim chief executive Barry Tootell until May this year, as well as its board, whose members included then group chief executive Peter Marks.

The investigation is believed to have begun before the latest revelations surrounding Mr Flowers, who stood down in June 2013, but sources indicated has been expedited in light of the intense focus on the situation.

Sources confirmed that the FCA is looking at enforcement action against individuals, but emphasised that no final decisions had yet been made.

The FCA investigation will run in parallel with the existing inquiry being carried out by West Yorkshire Police into the drug-related allegations surrounding Mr Flowers.

Once both are complete, a Treasury-initiated inquiry into the near-collapse of the bank and its directors will begin.