A record £730.5 million was paid out to victims of payment protection insurance (PPI) mis-selling by lenders in May, the Financial Services Authority (FSA) announced today.

This is the largest overall monthly payout to date and pushes the total paid out since January 2011 to £4.8 billion.

But with an estimated £9 billion of compensation due in total, the process still has a long way to go.

In May, Lloyds Banking Group, RBS and HSBC set aside £800 million extra between them, on top of their original pots to pay out from. Barclays set aside an extra £300 million in April.

There has been a huge jump in compensation since the British Bankers' Association trade body ended a legal battle in May 2011 which attempted to block the FSA's rules on compensation.

These rules force banks to review past sales of PPI – to cover loan or credit card payments when people cannot work – and contact mis-sold customers to offer money back, even to borrowers who have never complained.

The most recent figures come from the 24 firms responsible for 96% of complaints about the sale of PPI last year.