London ( CNN ) -- Former Barclays bank chief executive Bob Diamond will voluntarily give up bonuses worth $ 31 million after he resigned in the wake of a rate-rigging scandal , the bank said Tuesday . Diamond will still receive 12 months salary after his resignation last week , the bank said Tuesday . That 's £1.35 million ( about $ 2 million ) , according to the bank 's annual report . It is twice as much as he is entitled to under his contract , which has a six-month notice period , bank chairman Marcus Agius said . Barclays will also pay Diamond 's legal bills if he faces criminal investigation , a source close to the bank told CNN Tuesday . The source asked not to be identified because of the sensitivity of the information . Agius , giving evidence to the Treasury Select Committee inquiry into the scandal , said Diamond 's decision was one which `` the board welcomes and I am glad he has done it . '' In a statement , Agius said the board deeply regretted the circumstances that led to Diamond resigning from Barclays . `` Despite having no personal culpability , he recognizes more than anyone the negative attention that they have generated and has taken characteristically strong action to address that , '' Agius said . Barclays ' reputation has been hammered by a scandal over the rates at which banks lend each other money . The rate , known as the London interbank offered rate , or Libor , is is set every morning by banks posting the rate at which they are willing to borrow with the British Bankers ' Association . The BBA publishes Libor as a result of this . The Libor affects how much interest ordinary people pay on everything from credit card debt to home mortgages and student loans . Barclays was fined $ 450 million by British and American regulators last month after admitted some of its trading desks purposely underreported its interest rates . Diamond said he hoped the decision on his pay and bonuses `` will help close this chapter and allow Barclays to move forward and prosper . '' Agius ' evidence follows that of Bank of England 's deputy governor Paul Tucker Monday , in which he denied being pressured by politicians to ensure Libor rates were lowered . He also denied pressuring Barclays to lower its rates . Diamond last week said he was `` sorry , I 'm disappointed and I 'm angry '' about the rate-fixing . `` This was wrong and I 'm not happy about it , but we put all the resources we could to make sure it was dealt with . '' He said also `` this does n't represent the Barclays that I know and I love . '' Diamond blamed the wrongdoing on 14 traders out of `` a couple thousand . '' A report from the UK 's Financial Services Authority concluded the rate-fixing scandal was of the `` utmost seriousness . '' Between 2005 and 2009 , when Diamond was in charge of the investment branch of Barclays bank , traders were influencing the pricing of rates which impact up to $ 800 trillion of securities . E-mails revealed as part of the rate-fixing investigation showed traders were seeking beneficial rates for their trading positions . During the credit crisis of 2007 and 2008 , Barclays ' high Libor postings came under scrutiny and the bank , concerned about `` unfounded negative perceptions , '' lowered its Libor submissions , according to Barclays notes to the Treasury Committee . A host of other banks , including Deutsche Bank , Royal Bank of Scotland , Credit Suisse , Citigroup , JPMorgan Chase and UBS , are being investigated by regulators . Lawsuits have been filed against the banks in the United States , and are being prepared in the UK . CNN 's Jim Boulden , Irene Chapple , Richard Allen Greene and Nina dos Santos contributed to this report .
NEW : Barclays will pay the legal bills of former chief Bob Diamond if necessary , a source says . Chairman Marcus Agius is giving evidence on a rate-rigging scandal . Agius says Barclays deeply regretted the circumstances that led to Diamond resigning . The bank has agreed to pay him and his family an undisclosed sum in compensation for their losses.