Banks to be slapped with huge fines if politicians debanked in new major victory for Nigel Farage

Banks are required to carry out checks on Britons deemed "politically exposed persons" (PEP) and can refuse to serve them if they do not return a clean bill of health. But in future, unfair refusal of services will see fines issued.

It comes after Nigel Farage’s account with NatWest’s private bank Coutts was closed because his views did not “align with its purpose and values”.

His account closure due to his political views faced huge backlash and resulted in the chief executive Dame Alison Rose stepping down from her role.

The scandal led to calls from MPs and the Treasury for the FCA to get involved to assess the current banking guidance on PEPs.

Sarah Pritchard, executive director at the FCA, said the organisation is investigating whether banks are treating politicians unfairly.

She stated that it is within a bank’s right to carry out additional checks for PEPs, but states that such processes “should not feel like the financial equivalent of someone rifling through your bin”.

Pritchard said: “If we find that banks and others are more tick-box than risk-based, we will act. Because proportionate additional financial scrutiny should not make it harder than it needs to be to take part in public life.”

The regulator said they have a number of options in the case that a financial institution is found to be unfairly treating PEPs, including issuing fines.

The reviews conducted by the FCA are focusing on how “firms are applying the definition of PEPs to individuals”.

“This sets out that banks and others must be proportionate – with greater scrutiny on those who pose the greatest threat. And we have been clear that UK public figures should generally be considered low risk,” Pritchard said.

The FCA is conducting two separate reviews. The first is about how PEPs are treated and the second is looking into the general de-banking issue.

On Tuesday, the regulator published information about its first review.

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Speaking to the Telegraph, Pritchard said: “It is necessary and proportionate for banks to ask those with power for more information about sources of wealth and financial connections, for example.

"We’re aiming at, and we’re determined to achieve, a system that properly guards against risk, keeps our system clean and meets our international commitments, but does so proportionately so the trustworthy are not denied access to financial products and services necessary for everyday life.”

Pritchard said that if banks are found to be acting against PEPs, they will take action.

After his bank account was closed, Farage vowed to help others who have also been a victim of de-banking.

Speaking on GB News in July, fresh after the dismissal of Dame Rose, Farage said: “I want to know how many other people had accounts closed at NatWest and Coutts because of their opinions. And what can we do to make sure that nothing like this ever happens to anybody else in your banking group again?"

On the sheer size of this number, he added: “Most of these people aren't in my position, they haven't got the platform, they haven't got the opportunity to fight back.

“So if I can speak up for all of those people, we can deal with this nonsense. If we can get ultimately to the position where having a bank account becomes a right in our country, because you can't function otherwise in the 21st century without it, that would be a real victory.