Power Struggle: Revolut May Or May Not Be Granted A Banking Licence In The UK!

Nik Storonsky desperately needs the UK banking license
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Over the last 48 hours, rumors have been circulating about granting the UK banking license to Revolut. One hears that the regulators would deny Revolut the banking license. There was also talk that Revolut had offered the regulators to withdraw the application. The Guardian reports that the UK government intervened and coordinated talks with Revolut as part of its growth strategy. Founded in 2015 by Russian-born Nik Storonsky, Revolut is the highest-valued FinTech in the UK.

Sifted reported this afternoon that the Bank of England plans to deny Revolut the requested banking license, which must be approved by both the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA).

Revolut has been awaiting approval of its banking license in the UK for over two years since submitting its application. Regulators have been addressing various reputational concerns, including the late filing of accounts, breaches of EU regulations, and corporate culture criticisms directed at the fintech firm.

While regulators can deny Revolut a license, they may also consider granting a restricted license that imposes limitations on deposits or lending for approximately 12 months. This approach would allow the company to address operational shortcomings during that period.

However, the slow progress of the application process has caused frustration among Revolut‘s executives, including Nik Storonsky, who recently expressed that conducting business in the UK is challenging due to high taxes and an excessively bureaucratic regulatory environment. Storonsky mentioned that if Revolut were to go public, the company would likely choose to list in the US rather than London. This statement comes despite Revolut becoming the UK’s most valuable fintech firm in 2021, with a valuation of $33 billion (£26.5 billion).

Currently, Revolut operates in the EU with an ECB-issued banking license and a special banking license from the Bank of Lithuania. In the UK, some Revolut Group companies have various FCA authorizations but no banking licenses. This means that, for example, no loans can be granted in the UK as Revolut’s competitors Monzo or Starling Bank can do.

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