Controversy over Debanking: UK Banks Close 1000+ Accounts Daily, Including Those Of MPs – Urgent Need for Royal Commission
According to a report by The Guardian, UK banks close 1000+ accounts daily, sparking controversy over debanking. The data obtained through a Freedom of Information (FoI) request made to the Financial Conduct Authority (FCA) revealed that in 2016-17, around 45,000 accounts were closed by banks. This number has steadily increased over the years, reaching over 343,000 accounts in 2021-22, equating to more than 1,000 accounts shut every business day.
The closure of accounts has led to a debate, with the United Kingdom Independence Party (UKIP) leader Nigel Farage demanding a royal commission to investigate the matter. Farage expressed concern about a scandal and announced the launch of a website to advocate for individuals whose accounts had been closed without prior notification.
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Account Closures Spark Concern:
Among those affected, even Nigel Farage’s own bank account was closed, pushing him to support the establishment of a swift royal commission to address the issue. Many small businesses and individuals across the country have reported the abrupt closure of their accounts, without any wrongdoing on their part, causing significant distress and disruption.
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Politicians and Debanking:
Some politicians, including UK energy secretary Grant Shapps, have faced similar debanking experiences due to their classification as “politically exposed persons.” The FCA suggested that increased monitoring by banks for financial crime reasons might be contributing to the rise in account closures. To address the concerns, the UK government plans to introduce new rules, requiring banks to provide longer notice before closing accounts.
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