Recognise Bank has had its deposit restrictions removed by the Prudential Regulation Authority (PRA).

It is one of the few banks to receive full authorisation without restrictions since the start of the Covid-19 pandemic.

The announcement follows a £14m investment round last month, bringing total investment to £54m.

The new SME bank started offering unregulated commercial loans at the end of 2020, but the removal of deposit restrictions means it can now provide a wider range of services. FSCS-protected savings products for personal savers are due to be launched this week, while business savings accounts will follow later in the year.

The flow of funds into the bank from its savings products will enable Recognise Bank to increase lending to the UK’s small and medium sized businesses via a national network of regional hubs.

Jason Oakley, CEO of Recognise Bank, said: “This is a magic moment for Recognise Bank and the culmination of a three-year journey to build a new bank and provide much-needed support to the UK’s SMEs who have been increasingly let down by the mainstream banks.

“We have stuck to our plans and ambitions to be a fully regulated bank, and while other new entrants have either stumbled or fallen, Recognise Bank is already working with SMEs in the regions, lending and supporting their business ambitions.

“While the lifting of deposit restrictions is a successful milestone for Recognise Bank, it also marks the start of our next exciting phase. We can now offer savings accounts for personal savers, as well as business customers whose savings needs have been completely ignored by the big banks for years.”