Barclays has pledged to pay out compensation to everyone to whom it sold payment protection insurance (PPI) and who made a complaint before 20 April.

The bank says it will reimburse customers the total value of all premiums with an added 8 per cent interest. It says it will be the first to dole out PPI compensation on a "no-quibble" basis. The bank believes these efforts will impact tens of thousands of customers, especially those put on hold during the period of judicial review.

"Barclays made a commitment to process all on-hold PPI complaints as soon as practicable. We have said before that when we get things wrong, we apologise, and work hard and work fast to put them right as quickly as possible," Barclays released in a statement.

The bank says its clients have been waiting long enough for these reimbursements, and feels these measures will quickly clear the backlog and enable them to begin evaluating new cases.

The new PPI sales rules were implemented in 2010 by the Financial Services Authority and the Financial Ombudsman Service.

These rules required PPI sellers to evaluate every past sale, assessing whether or not each customer has a claim for mis-selling.

PPI complaints were streaming in while the court case was going on. The FOS reported receiving 40,000 PPI complaints since the beginning of April 2011 from customers angry that their first complaint had been ignored by their bank.

After the losing the case in April, Lloyds Banking Group allotted £3.2bn to cover the cost of this compensation. Barclays followed with £1bn, then RBS with £850m and HSBC with £269m.

To help ease the banks' burden of the vast number of complaints, the FSA has granted Barclays, Lloyds, and RBS a time extension on the normal eight-week period to deal with their backup of complaints and new complaints still coming in.

The FSA's extension requires complaints put on hold during the judicial review to be settled by the end of August, new complaints following the judicial review but received prior to 31 August to be settled within 16 weeks and complaints received after August but within 2011 to be settled within 12 weeks. Once 2012 begins, the normal timetables will be reinstated.

Margaret Cole of the FSA believes these extensions will help banks assess complaints "properly and fairly".

"Some firms are facing a huge backlog and now a surge of new complaints, which has created a bottleneck," Cole said. "It is not in the interests of consumers to receive further poor handling of their complaints as a result."

Barclays has pledged automatic reimbursement for complaints filed before 20 April. They will continue to evaluate complaints made since then.

"We can confirm that we are contacting customers whose complaint was put on hold on or before 20 April with an offer to settle their complaint in full as a gesture of goodwill," Barclays said.

Peter Vicary-Smith, chief executive of consumer rights group Which?, praised Barclays for its efforts.

"It's fantastic to see Barclays stepping up in this way, acknowledging their mistakes and refunding customers what they're owed, no questions asked," Vicary-Smith said. "Hopefully this will have a domino effect and other banks will follow suit."