The UK has simplified its financial regulations and accelerated approvals process with an aim to allow setting up of more than 30 new banks in the country.
The country’s banking regulators has approved five new lenders and held initial discussions with 25 other applicants, as reported by The Financial Times.
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The five banks authorized in the year to April include Axis Bank, Union Bank of India, FCMB, UBA Capital, and Paragon Bank.
In April 2013, the Prudential Regulation Authority (PRA) arm of the Bank of England and the Financial Conduct Authority (FCA) removed cumbersome licensing process, while prescribing easy capital and liquidity requirements.
With this new initiative, the banking watchdogs want to attract more small banks into a market long dominated by the four or five high-street banks.
As per the new capital rules, small banks are required to hold a minimum of £1m capita, compared to £5m earlier. Further, the regulators are also supporting "off-the-shelf" banking technology, which should make it easier for new lenders.
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By GlobalDataPRA chief executive Andrew Bailey was quoted by the Financial Times as saying, "Reducing barriers to entry can be achieved alongside continuing to ensure new banks meet basic standards that prevent risks to the safety and soundness of the UK financial system."
