Pay in the banking industry has been high for too long and needs to be corrected, the chairman of state-backed Royal Bank of Scotland told BBC Radio on Friday.

Pay has been high for too long ... particularly in the banks, particularly in the investment banks, shareholders have done pretty badly and employees have done pretty well certainly over the last 10 years, said RBS Chairman Philip Hampton.

That needs to be corrected. It actually isn't a society or fairness issue, it's a straightforward business issue. Too much of the money has not been going to the right place, he added.

Last month, Hampton and RBS Chief Executive Stephen Hester gave up their million pound bonus packages following intense public anger over the awards, with politicians from all major parties calling on them to decline the payments.

Hampton said RBS had underestimated the scale of the public outcry over the bonuses, but added that, compared to many other banks and businesses, salaries at RBS were not that high in relative terms.

RBS is 83-percent owned by the government after a taxpayer backed bailout during the 2008 credit crisis.

Hampton also denied media reports that the RBS board had threatened to resign as a result of the bonus payment row.

That threat was never raised, he said.

(Reporting by Sudip Kar-Gupta; Editing by Michael Holden)