German finance regulator imposes restrictions on N26

The German finance regulation body BaFin has announced that it will impose further restrictions on the popular online bank, N26. Here’s what N26 account holders need to know:

N26 back in hot water with German finance regulator

The German finance regulation body BaFin announced on Monday that it would impose further restrictions on N26 bank. 

According to BaFin, the online bank “lack[s] proper business organisation” and has “serious deficiencies, particularly in risk and complaint management and in the organisation of the lending business”. 

This isn’t the first time that the start-up “neobank” has been in hot water with BaFin. In 2021 BaFin investigations found that it was possible to open an N26 account with a fake ID card. The bank was charged 4,25 million euros in penalties following the investigation. 

In another case in March 2025, BaFin charged the bank 15.000 euros for failing to properly inform the regulatory body that N26’s supervisory board had approved a loan for one of the bank's executives.

Speaking of the most recent investigation, N26, which is based in Berlin, said in a statement to AFP that it was in "close and constructive dialogue with the supervisory authorities and the appointed special representative".

What does BaFin’s decision mean for N26 customers?

So what does the latest investigation mean for the around 8 million customers who bank with N26 across the 24 European countries in which it operates?

Although BaFin has accused N26 of violating the German Banking Act, it is largely customers in the Netherlands who will be impacted by the latest investigation.

As a result of the lack of “proper business organisation” and “serious deficiencies”, for now the bank will be required to hold more capital and will no longer be permitted to lend new mortgages in the Netherlands. The regulator said it would continue to monitor operations at N26.