Scandal-hit banking quango in row over redundancies

TOM SAUNDERS

Sun, February 15, 2026 at 7:00 PM GMT+9 2 min read

A scandal-hit banking quango is embroiled in a row after using controversial redundancy clauses to block former staff from launching legal claims.

Open Banking Limited (OBL), established in 2016 to encourage banks to share data, has attempted to muzzle former employees during a recent round of redundancies by prohibiting them from taking action against the group once they leave.

The redundancy contracts include clauses restricting individuals from pursuing grievances after termination. Former staffers are also prevented from submitting subject access requests to obtain their personal data and from raising complaints with the Information Commissioner’s Office.

It is unclear whether such terms are enforceable, but OBL maintained in a statement that its historic settlement agreements were legal.

It is understood that at least one former employee is proceeding with an employment tribunal claim because of concerns about the way the redundancy process at OBL has been handled.

OBL was founded a decade ago to encourage savers to switch their bank accounts and boost competition among lenders.

It is funded by nine of the biggest banks in the UK, and regulators at the Competition and Markets Authority are tasked with overseeing the venture.

A spokesman for OBL said that it had “updated the terms of our settlement agreements” and was “confident that our approach complies with employment law”.

It is not the first time that the little-known watchdog has found itself under scrutiny.

In 2021, an independent report found a “toxic culture” of bullying and intimidation prevailed at the quango, which led to the resignation of its chairman.

The Telegraph revealed details at the time of the mistreatment of staff at OBL, which included on-the-spot sackings, verbal abuse, sexism and a culture of cocaine use.

A spokesman for OBL said that, since 2022, a “wholesale cultural overhaul has taken place” at the regulator with “full senior leadership change, supported by robust internal governance, processes and procedures”.

The revelation of the redundancy clauses comes as OBL will soon transition to a new entity which will be funded differently and overseen by the Financial Conduct Authority instead.

The big banks that pay for OBL to operate have criticised the cost of funding it in the past, and last year the group’s chairman said the future entity would have a “fairer and more equitable funding model”.

A spokesman for OBL added: “From time to time at OBL, as with all organisations, there is business change. As a consequence, regrettably, there are a small number of redundancies.

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“As part of our redundancy process, OBL may offer individuals a voluntary standard settlement agreement. These agreements are entered into on a voluntary basis by both parties as a means of concluding an individual’s employment. We note that the majority of our small number of redundancies are concluded in this manner.”

The CMA declined to comment.

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