The regulator said individuals involved were located in the UK, Japan, Singapore and the US and at least 219 requests for inappropriate submissions were documented.
On top of this oral requests that were not documented were also made between January 2006 and November 2010.
The fine follows a £59.5m FSA penalty for Barclays in relation to Libor misconduct back in June last year.
It comes after what the FSA termed a “significant cross-border investigation”, which led the US Commodity Futures Trading Commission (CFTC) to issue the part-nationalised bank with a $325m fine.
RBS agreed to settle early with the FSA and so qualified for a 30% discount. It would otherwise have been fined £125m by the UK regulator.
UBS AG has also been penalised by the FSA, with a fine to the tune of £160m issued in December last year.
The regulator said RBS did not have any Libor-related systems and controls in place until March 2011 and failed to adequately address the risk that derivatives traders would seek to influence RBS’ Libor submissions until June 2011.
The bank established a business model that sat derivatives traders next to Libor submitters and encouraged the two groups to communicate without restriction despite the obvious risk derivatives traders would seek to influence RBS’ Libor submissions, the FSA added.
Tracey McDermott, director of enforcement and financial crime, said: “The failures at RBS were all the more serious because of the attempts not only to influence the submissions of RBS but also of other panel banks and the use of interdealer brokers to do this.
“During the course of the FSA’s work on LIBOR, RBS provided the FSA with an attestation that its LIBOR related systems and controls were adequate. This was not correct. Primary responsibility for the conduct of the individuals within firms and the efficacy of the controls that are in place, rests with those firms. The FSA takes it very seriously when firms tell us that they have appropriate systems but do not.
“This is the third penalty we have imposed in relation to LIBOR related misconduct. The size and scale of our continuing investigations remains significant.”