UK-based fintech startup Kroo has secured a restricted banking licence from the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

The development follows the firm’s £17.7m Series A funding round earlier this month.

The restricted authorisation will allow Kroo to accept deposits up to £50,000 in total.

Currently, the fintech is in mobilisation stage that allows the new banks to finalise their systems and infrastructure before it secures a full licence.

During this period, the firm will also be able to test its banking products and refine some elements of its offering.

Kroo will have 12 months to exit mobilisation, failing which, the process will start again. It also needs to raise new funds during this period.

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The firm currently provides prepaid debit card and app that allows users to create groups with friends, track spending, and split and pay bills.

After it exits mobilisation, Kroo plans to wind up its prepaid card scheme and enable current users to transfer their existing accounts over to the new Kroo current account for free.

Meanwhile, it will continue to update its app and work to build the core banking platform.

Kroo CEO Andrea Gottardo said: “It is incredibly exciting to finally be a bank that is authorised with restrictions. Very few firms in the UK get to this point and this represents a huge milestone for the entire team.”