Skip to content
Search

Latest Stories

Financial watchdog faces criticism from MPs over debanking review

FCA said it will be doing further work over coming months

Financial watchdog faces criticism from MPs over debanking review

THE Financial Conduct Authority (FCA) is under fire from MPs who have raised 'serious questions' about its recent review of the debanking scandal, calling it a 'whitewash', reported the Telegraph.

The FCA on Tuesday (19) said that there is no evidence so far that Britain's banks have been closing accounts because of people's political views, though more detailed scrutiny is needed.


British finance minister Jeremy Hunt last month asked the FCA to urgently investigate terminations of bank accounts and suggested that lenders who have broken the law should be fined.

The practice, known as 'debanking' became a political issue after former Brexit Party leader Nigel Farage said his account at private bank Coutts, part of NatWest, had been closed due to his political views.

The FCA said that it looked at data from 34 banks and building societies, focusing on July 2022 to June 2023, but the speed of its inquiries meant there were some gaps, limitations and inconsistencies to information provided.

The watchdog's failure to include Nigel Farage's case at Coutts, where his account was threatened with closure due to his beliefs, has triggered controversy.

FCA officials defended their decision not to investigate Farage's case, stating that it was a 'high-profile example' being handled separately by the bank involved and that it fell outside the reporting period.

This explanation did not appease critics, who accused the FCA of conducting a superficial review.

Farage himself denounced the review as 'a whitewash and an absolute farce' and called for a complete overhaul of the FCA's leadership.

Tory MP Danny Kruger echoed these sentiments, asserting that the FCA had merely asked banks if they were guilty without actively seeking input from potential victims. He also called for a closer examination of the FCA itself.

The FCA's review did identify eight cases where the 'expression of political or any other opinions' was suspected as a reason for account closures. However, the watchdog concluded that this was not the primary reason in any of these cases. Instead, customer behaviour, including the use of racist language against staff, was the predominant factor leading to debanking.

Criticism also stemmed from the quality of the data collected during the review. The FCA admitted that some of the data supplied by institutions was unverified, and it acknowledged that as many as 20 per cent of account suspensions and closures were attributed to "Other," leaving the watchdog uncertain about the reasons behind these actions.

Nikhil Rathi, chief executive of the FCA, told the Telegraph that while no financial institution reported closing accounts primarily due to political views, further verification of bank-submitted data was necessary.

City minister Andrew Griffith acknowledged the FCA's report and emphasised the need for more robust validation of banks' submissions and a thorough follow-up on debanked customer perspectives.

While the FCA review found no evidence of political debanking, it did find that UK expats were facing the most at risk of having their accounts shut or suspended.

Separately, the FCA is reviewing how banks conduct mandatory extra checks on 'politically exposed' customers and their families for money laundering risks, with a report due by the end of June 2024.

(with inputs from Reuters)

More For You

Rosneft in early talks to sell India refinery stake to Reliance

Reliance Industries chairman Mukesh Ambani (Photo: Getty Images)

Rosneft in early talks to sell India refinery stake to Reliance

RUSSIAN oil major PJSC Rosneft Oil Company is in early discussions with Reliance Industries to sell its 49.13 per cent stake in Nayara Energy, an Indian energy company that operates a 20-million-tonnes-per-year oil refinery and 6,750 petrol pumps, sources familiar with the matter said.

The deal, if finalised, would see Reliance overtake state-owned Indian Oil Corporation (IOC) to become India’s largest oil refiner. It would also provide Reliance with a significant expansion in fuel retailing, where it currently holds a relatively small presence.

Keep ReadingShow less
modi-trump-getty
Trump shakes hands with Modi during a joint press conference at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Key issues in India, US trade talks

TRADE talks between India and the US have hit a roadblock over disagreements on duties for auto components, steel and farm goods, Indian government sources said to Reuters, dashing hopes of reaching an interim deal ahead of president Donald Trump's July 9 deadline to impose reciprocal tariffs.

Here are the key issues at play:

Keep ReadingShow less
Anil Agarwal

Vedanta Resources, which is based in the UK and owned by Indian billionaire Anil Agarwal, has been working on reducing its debt. (Photo credit: Getty Images)

Getty Images

Anil Agarwal’s Vedanta Resources signs £438 million refinancing deal

VEDANTA LTD said on Thursday that its parent company, Vedanta Resources, has signed a loan facility agreement worth up to £438 million with international banks to refinance existing debt.

The refinancing move, where old loans are replaced by new ones, often at better terms like lower interest rates, has led ratings agencies such as S&P Global Ratings and Moody's to upgrade their outlook on the company this year.

Keep ReadingShow less
Trump-Getty

Trump said that while deals are being made with some countries, others may face tariffs.

Getty Images

Trump says major trade deal with India may be finalised soon

US PRESIDENT Donald Trump on Friday said a "very big" trade deal could be finalised with India, suggesting significant movement in the ongoing negotiations between the two countries.

“We are having some great deals. We have one coming up, maybe with India. Very big one. Where we're going to open up India," Trump said at the “Big Beautiful Bill” event at the White House.

Keep ReadingShow less
Asda suffers nearly £600m loss as debt and IT costs surge

Asda co-ownerMohsin Issa. (Photo: Asda)

Asda suffers nearly £600m loss as debt and IT costs surge

ASDA, one of Britain’s largest supermarkets, has reported a pre-tax loss of £599 million for 2024, swinging sharply from a £180 million profit the previous year.

The loss comes despite total sales rising by over £1 billion to £26.8bn, as the retailer faces mounting debt costs, falling sales, and spiralling spending on a major IT overhaul, the Telegraph reported.

Keep ReadingShow less