You’ll probably need an response from one of the Monzo team (perhaps @paul?) to get a complete answer.
But having a look through the site, one of his posts got me to this page on the Bank of England’s website which explains the process for starting a bank http://www.bankofengland.co.uk/pra/nbsu/Pages/default.aspx
This guide seems to explain the process in quite a bit of detail. When it comes to capital requirements, here’s what I could find:
SSB = Small Specialist Banks.
A SSB is defined as a bank with less than €5 million of capital which provides current and savings accounts, or lends to SMEs, or offers residential mortgages.
For SSBs, the initial minimum capital requirement is £1 million, plus buffers. The £1 million is the Base Capital Requirement (BCR), and may apply both during and after mobilisation.
From page 22.
So obviously Monzo’s already got enough capital to cover that from the previous fundraising rounds, assuming they didn’t have to buy too much beer for the last open office
RWA = risk-weighted assets
ICG = Internal Capital Guidance
BCR = Base Capital Requirement
Once the bank’s RWAs rise beyond a very low level, and its ICG exceeds the BCR, the ICG sets the effective level of capital to be held (plus buffers).
Also from page 22.
• Pillar 1, 2a and 2b.
• PRA Buffer, Capital Conservation Buffer, (Countercyclical Buffer).
• New bank approach to setting buffers: wind down costs.
• Leverage ratio.
• Minimum requirement for own funds and eligible liabilities (MREL).
From page 49.
After Authorisation is the stage after Mobilisation is complete. And your guess on what the above means is as good as mine!
But it looks like Monzo shouldn’t need to raise any extra capital before they can be granted the full banking license