Revolut cards is seen in this illustration photo taken in Krakow, Poland on March 29, 2024.
Jakub Porzycki | Nurphoto | Getty Images
LONDON — Bank of England Governor Andrew Bailey told CNBC there hasn’t been a “falling out” with the U.K. government over delays to fintech giant Revolut’s long-awaited bank license.
Last week, the Financial Times reported that a meeting arranged by British Finance Minister Rachel Reeves with Revolut and the Prudential Regulation Authority (PRA) — an arm of the BOE that oversees banks — was cancelled after an intervention from Bailey.
Authorizing Revolut as a fully licensed bank has become an important issue for the U.K. government, particularly as key figures in the tech industry have challenged tax changes that affect the wealthy.
However, in an interview with CNBC’s Ritika Gupta on Thursday, Bailey denied any suggestion that relations between the BOE and Treasury had soured over delays to Revolut’s bank license approval process.
“There’s been no falling out between [Reeves] and I on this, or indeed on anything,” he said. “Actually, we have very good relations, and I think both the Bank and the Treasury have made that clear.”
Bailey added that while he couldn’t comment too much on Revolut specifically, the Prudential Regulation Authority is working things through with the digital banking startup during its “mobilization” process.
The fintech giant was granted a banking license with restrictions in July 2024 from the U.K.’s PRA, bringing an end to a years-long application process that began back in 2021.
This key victory moved Revolut into what’s known as the “mobilization” phase of a company’s journey toward becoming a full-fledged bank.
During this period, firms are limited to holding only £50,000 of total customer deposits — well below the hundreds of billions of pounds customers deposit with major high street lenders such as Barclays, HSBC and Santander.
Revolut customers in the U.K. are also still served by the company’s e-money unit, instead of its banking entity. This means they are not directly insured by the Financial Services Compensation Scheme, which protects customers up to £85,000 if a firm fails.
Delays to Revolut have been a point of contention for the government, which has come under fire from the U.K. tech industry for not doing enough to ensure the country can compete effectively with the U.S. and other key hubs.
Bailey stressed that there was “no trade off between financial stability and growth in the economy.” However, he suggested that he was open to rule changes to enable the fintech sector to flourish.
“We are very open to making changes where they’re appropriate,” he said.