RCI Bank customers get UK savings protection
RCI Bank now has a UK banking licence, meaning its UK customers have their savings protected by the Financial Services Compensation Scheme in the unlikely event it goes bust.
Until now the French bank, which has 75,000 customers, has operated in the UK under a scheme known as 'passporting', which allows a firm in one European Union (EU) member state to provide services to customers in other member states without having to get direct authorisation from the other states.This meant that RCI Bank customers were protected by the French state compensation scheme.
But from now on, UK customers will be protected instead by the UK's Financial Services Compensation Scheme (FSCS) – which covers £85,000 per person, per institution if a bank goes bust – giving customers certainty in the run-up to the UK's expected exit from the EU.
RCI Bank's easy-access savings account doesn't offer the highest rate currently available, but features in our Top Savings Accounts guide as a decent option if you've lots of cash to save. Read full details of how the FSCS scheme works in our Are your savings safe? guide.
Why did RCI Bank apply for a UK banking licence?
At the moment, many European banks operate in the UK under the passporting scheme, but after the UK leaves the EU – currently set to happen on 29 March – it's not clear whether this will be able to continue.
As a result, the UK financial regulator the Financial Conduct Authority (FCA) has set up a 'temporary permissions regime'. This will allow European Economic Area-based firms passporting into the UK to continue new and existing regulated business in the UK for a limited period while they seek full FCA authorisation, if the UK leaves the EU without a deal or a separate arrangement in place.
In the meantime, firms need to apply for a UK banking licence, which is what RCI Bank has successfully done. Many other European banks without UK banking licences are also in the process of applying. See our 25 Brexit need-to-knows for more info.
What does RCI Bank say?
RCI Bank chief executive Jean-Louis Labauge said: "We have been in the UK savings market for almost four years and are committed to our future here. We had the opportunity to strengthen our roots in Britain and are absolutely thrilled that we've now secured our UK banking licence.
"Nothing changes for our customers, except the protection of their deposits simply moves to the FSCS and our footprint in the UK market is further strengthened."
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