German online bank N26 hit with new restrictions

German financial regulators on Monday imposed new restrictions on online bank N26 over shortcomings in its operations, the latest turbulence to hit the lender.

"There were serious deficiencies, particularly in risk and complaint management and in the organisation of the lending business," according to watchdog BaFin, which carried out a special audit of the lender last year.

The watchdog ordered N26 to take steps to address the problems and said it was appointing a "special representative" to monitor the bank's progress.

The bank was also blocked from conducting new mortgage lending in the Netherlands and was ordered to hold additional capital, the regulator said.

N26 said that it was in "close and constructive dialogue with the supervisory authorities and the appointed special representative" in a statement sent to AFP.

The bank, which was founded in 2013 and operates in 24 countries, said it was implementing a plan with measures such as adjustments to governance structures.

It was just the latest problem for the online bank, which has been in the regulator's crosshairs since 2018 after a media investigation found it was possible to open an account with forged IDs.

The bank was subsequently hit with a hefty fine for problems in its anti-money laundering operations.

These concerns prompted regulators to impose a cap on the number of new customers it could accept, although this was lifted last year.

As concerns mounted about shortcomings earlier this year, N26 reshuffled its top leadership.