Revolut Secures French Banking License Amid ECB Restrictions

Revolut, a fintech company, has obtained a full banking license for its French subsidiary, Revolut Bank S.A., marking its second such entity in the EU after Lithuania. However, this approval comes with a caveat: the European Central Bank (ECB) has imposed restrictions on new product launches, which remain in place for both entities.

The French license allows Revolut to operate as a bank in France and plans to extend services progressively to Germany, Ireland, Italy, Portugal, and Spain. With this approval, Revolut now serves over 30 million customers across Western Europe, including more than 7 million in France alone.

Revolut's growth has been rapid, but it has also raised concerns about its governance infrastructure. The ECB imposed a Pillar 2 capital requirement of 4.5 percent on Revolut Bank UAB, the Lithuanian entity, which is the highest among ECB peers. This requirement is not a credit-risk signal but rather a governance signal, indicating that the ECB believes Revolut's internal control infrastructure needs improvement.

Revolut's CEO for Western Europe, Béatrice Cossa-Dumurgier, stated that the approval reflects months of close collaboration with regulators and demonstrates the company's commitment to meeting high standards. The French license is a significant step forward for Revolut, but it remains to be seen when the products that require a domestic banking entity will become available.