After the Central Bank (BC) decided, on Friday (28/11), that payment institutions and fintech companies will not be able to use expressions such as “bank” or “bank” in their names if they do not have an official permit to operate as a bank, Nubank – one of those potentially affected by the new rules of the monetary authority – spoke out on this topic.
Understand what needs to change
According to BC’s understanding, institutions will be prohibited from using terms in their names that are not related to their original activity. One of the objectives of the Monetary Authority is to prevent indiscriminate use of the term “bank” by companies that do not have this specific mandate.
Nubank’s status is the most symbolic because of the heft of the institution, which many people recognize as a bank. With this change, it is possible that fintech companies, which generally operate under a payment institution (rather than a bank) license, will be banned from using the term in their names. So, Nubank must be excluded.
The standard requires affected companies to submit, within 120 days, an adaptation plan. Full implementation is expected to be completed within one year.
“Establishments will be prohibited from using terms that indicate an activity or type of establishment, in Portuguese or in a foreign language, for which they do not have a specific operating permit,” the BC informed.
Read also
-
economy
British Columbia calls for fintech name change, presses Nubank and PagBank
-
a job
In a meeting with the union, Nubank management rules out canceling the layoffs
-
a job
Nubank employees publish statement against layoffs. He reads
-
a job
“They confused the corporate channel with the social network,” says Nubank’s CEO.
What does Nobank say?
In a memo sent to CapitalsNobank confirmed that it is “working on analyzing the new decision of the Central Bank regarding the naming of financial institutions.”
“We reinforce our historic and non-negotiable commitment to strictly follow all applicable legislation and regulations in the country, respecting deadlines and decisions of the monetary authority,” says Nobank.
However, the fintech points out in the statement that “the standard relates only to the name of the institutions and not the services provided, and that it has all the necessary licenses to offer the products currently available on its platform.”
“Our operations and the offering of our products and services continue as normal, without any impact on customers,” Nobank adds.
What BC says
According to the BC, all payment institutions that use terms such as “bank” or “bank” must regulate themselves, whether by rebranding, modifying their trading name or even corporate restructuring, so as not to risk regulatory penalties.
The rule aims to avoid consumer confusion and prevent fintech companies that do not have a banking license from presenting themselves in a way that misleads the public into believing that they have the same rights and guarantees as a traditional bank, such as coverage by a Credit Guarantee Fund (FGC).
Furthermore, this measure is part of a broader regulatory tightening on fintech companies and payment institutions. Recently, the Bank of Colombia also raised the required capital requirements for these companies – a move that, according to the agency, aims to strengthen the resilience of the financial system.