Revolut’s Banking License Delay: Insights from Bank of England Governor
LONDON – Andrew Bailey, the Governor of the Bank of England, spoke to CNBC about the ongoing delay in banking licenses for the FinTech company Revolut, stating he has not been in touch with the UK government regarding the matter.
Recently, the Financial Times reported that a meeting involving British finance minister Rachel Reeves and representatives from the Bank of England and the Prudential Regulatory Authority was called off due to Bailey’s intervention.
The UK government recognizes the importance of fully authorizing Revolut as a bank, especially as tech industry leaders challenge tax reforms affecting wealthier individuals.
In his interview with CNBC’s Ritika Gupta, Bailey dismissed suggestions that a rift between the Bank of England and the Treasury contributed to the delays in Revolut’s banking license approval. “There were no drops in communication between Reeves and me about this matter,” he clarified.
While Bailey could not provide further details, he noted that Prudential regulators are actively advancing the licensing process for digital banking startups during what he termed the “mobilization” phase.
Recent Developments for Revolut
The FinTech firm received a restricted banking license from the UK PRA in July 2024, finally concluding a lengthy application journey that began in 2021. This milestone has ushered in what is known as the “mobilization” phase, where the company is currently restricted to holding only £50,000 of total customer deposits.
While Revolut’s UK customers are not classified under traditional banking, the company’s electronic money unit still operates, meaning it isn’t directly covered by the financial services compensation scheme that insures deposits up to £85,000 in case of a company failure.
The delays surrounding Revolut’s licensing have sparked concern for the government, which faces criticism from the UK’s tech sector for not being competitive enough with the US and other leading markets.
Bailey indicated that there is “no trade-off between economic stability and growth,” yet he conveyed a willingness to consider rule changes that would support the growth of the fintech sector. “We are very open to making changes in the right places,” he stated.
