Revolut’s UK banking licence ‘held up’ by concerns about risk controls

Revolut’s banking licence has reportedly been delayed by British regulators’ concerns over the lender’s global risk controls.

The digital bank first applied for a UK banking licence in 2021 and received a licence with some restrictions last year, taking a step closer to its eventual stock market listing.

Revolut recently reached 65million customers globally and the Prudential Regulation Authority (PRA) has concerns about whether its risk controls can keep up with this rapid growth, according to the Financial Times.

Bank of England officials who oversee the PRA have reportedly sought commitments from Revolut that it will build its risk management infrastructure to match its expansion plans.

Without a full banking licence from the PRA and Financial Conduct Authority, Revolut’s banking division is only allowed to hold £50,000 in total deposits.

The usual mobilisation phase usually takes 12 months, according to the PRA, but Revolut has been at this stage for more than 14 months. 

However, this can take longer if it is for larger companies.

A spokesperson for Revolut referred to its July statement and said it was not ‘rushing to meet a specific date’.

They added: ‘We are progressing through the final stages of mobilisation and continue to work constructively with the PRA. 

‘Given Revolut’s global scale, this is the largest and most complex mobilisation ever undertaken in the UK. A thorough review is an expected part of the process and getting this right is more important than rushing to meet a specific date.’

Last month, co-founder Nik Storonsky said that securing a full UK banking licence was Revolut’s ‘number one priority’. 

At the unveiling of its Canary Wharf headquarters, it also announced plans to expand into 30 new countries by 2030 and reach 100 million customers.

The digital bank has already secured banking licences in the European Union, through the central bank of Lithuania, and in Mexico. It has also been given the green light to set up a bank in Colombia, but further approvals are needed before it can start lending.

It has also set its eyes on the US, reportedly weighing up buying an American lender to allow it to operate there.

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