LONDON BRIEFING:WHAT'S the appropriate level of compensation for a man forced to spend the weekend in jail because his bail surety couldn't be paid? Or for a couple whose long-awaited house purchase fell through because the money never arrived?

And how do you make it up to a four-year-old who went without a birthday party – and presents – because her parents couldn’t get their hands on their own cash?

These are just a few cases of the real personal hardship suffered by millions of customers of Royal Bank of Scotland’s NatWest and Ulster Bank chains after a massive computer meltdown last week threw RBS’s payment processing systems into chaos.

Some early estimates suggest the bailed-out bank may be landed with a bill of as much as £100 million, but that figure will rise the longer the crisis – now entering its second week – continues. While the software problem has now been fixed, the backlog was running at 100 million transactions at one stage.

So for now, at least, the question of compensation is on the back burner as the bank and its chief executive, Stephen Hester, battle to bring the crisis under control. RBS said yesterday that the backlog had largely been cleared although, for Ulster Bank customers, it will take until next week.

However, there were worrying signs that other clearers and their customers were being caught up in the chaos that effectively froze accounts for huge numbers of the bank’s 17 million account holders.

The unions have blamed widespread cost cuts at the bank for the computer glitch – more than 30,000 posts have been axed at RBS since the financial crisis struck, including hundreds of IT and systems roles, which have been outsourced to India.

RBS denies suggestions that the problems started in Bangalore or indeed had anything to do with outsourcing but it has yet to provide a satisfactory explanation as to why it appears to have taken three days to track down and tackle the problem.

It’s clear, though, that what should have been a routine software update on a Tuesday evening has erupted into one of the worst system failures ever suffered by the banking industry. IT experts queried why RBS would choose a busy weekday to install a software upgrade, rather than the quieter hours of the weekend, when such work is usually carried out.

RBS is also felt to have been less than forthcoming about the potential scale of the problems when they first arose.

As other banks and their customers became caught up in the backlog, City watchdog the Financial Services Authority urged those doing business with RBS account holders to be “understanding”. The governor of the Bank of England, Sir Mervyn King, waded in yesterday, taking the opportunity of a Westminster grilling by politicians on the inflation report to call for a full enquiry, saying he’d been in close contact with senior RBS management over the weekend.

He warned it would take time to catch up and said, while an investigation must be held, what was important now was to provide support.

The systems debacle piles the pressure on the RBS chief executive, who was forced to give up his £1 million bonus in January after a huge political row. Normally, discussions about his current year payout would not start to take place until the end of the year but, with 2012 barely halfway through, there are already widespread calls for Hester to again forfeit any bonus.

To be fair to the RBS chief executive, the bonus is probably the last thing on his mind. He has a great deal of explaining to do – the FSA wants to talk to him and the Treasury select committee will almost certainly call a hearing.

And then there’s the question of just how much this will cost the state-controlled bank. RBS was the biggest blue chip faller yesterday, with its shares down almost 4 per cent as the market fretted about the final bill.

The FSA requires that banks have robust plans in place for just such a failure – and if RBS’s recovery processes are found lacking, the bank could be hit with a hefty fine.

Apart from compensation, there will be sizeable overtime payments for staff working to clear the backlog. Business will undoubtedly be lost, as customers move elsewhere. Those customers are now also being targeted by “phishers”, with some fraudulent emails purporting to come from one Stephen Hester.

Fiona Walsh writes for the Guardian newspaper in London