Businessman and campaigner Neil Mitchell, who spoke at the Lafferty conference in London in September, today announced the Bank Claims Group Limited as a litigation management company to take collective action against RBS and Lloyds. Mr Mitchell is the whistleblower who brought allegations of widespread fraud at RBS's GRG unit. In a statement, Mr Mitchell noted that "In the UK the headline claims in the litigations will be that RBS and Lloyds HBOS through their respective GRG and BSU restructuring units systematically sought to defraud their customers for their own commercial purposes targeting cash and asset rich businesses which they then funnelled into their GRG and BSU units on the basis of the pretext of a default (often invented), applied heavy charges, placed them into a manufactured insolvency process and then in many cases obtained their key assets at below market value prices, or had them sold off by complicit advisers, accountants and administrators to associated vulture funds or in the case of RBS often sold to their own company West Register." Through the Bank Claims Group Limited, Mr Mitchell will lead 530 "verified and validated" cases already gathered, which he says have a conservative asset value of £2.5 billion. "The claim will have a starting quantum of circa £15 billion — which is material given that RBS only has a market capitalisation today of £26.6 billion," he added. Additional detail is available on the new website Banks Claims Group.
The other piece of mind-boggling news we can share today is that the Interledger Protocol will be used for the infrastructure behind Mowali, the interoperable wallet project now backed by MTN and Orange, which will potentially turn the entire mobile payments system in Africa into an open loop system. That sentence above contains a few words that send many people to sleep, but don't overlook the massive significance of what is happening here, especially since it is backed by Bill Gates, and based on long experience. He's far from the sole player in what is an enormously risky venture — as far as its opponents go. It's also taken several layers of players to get to this moment. We've written extensively about blockchain and Mojaloop here on Lafferty News, but now is a good time for a refresher. Here are the main players:
- The Bill and Melinda Gates Foundation is supporting the LevelOneProject for financial inclusion via digital finance projects
- The Interledger Protocol, developed at Ripple with support from the W3 community. The protocol operates with two modes: an "atomic mode" between institutions using the same currencies, and universal mode for others, which uses the Ripple token to move value.
- Mojaloop is the open-source software underlying the project
Mowali is the name of the mobile wallet interoperability joint venture announced in November by MTN and Orange — and which will be extended to all mobile money operators in Africa. The success story of mPesa had one problem: it was a closed loop system, forcing all users to operate through mPesa — though by the time mobile money reached Kenya's neighbour Tanzania, the government had pushed for interoperability among Tanzania's mobile providers. The may do the same thing for all of Africa — and would pose a major challenge to banks and payments providers currently running payments and remittances services into and out of Africa.
So, are banks still hanging around waiting for the UK government to make some kind of decision on Brexit? Are you having a laugh? Most banks and payments processors have long since decided to press ahead with changes ahead of whatever kind of Brexit Europe and the UK ends up with. With uncertainty hanging over the political exit process, banks could not afford to gamble on a reversal of what we've openly described as a slow motion train wreck. Reuters today helpfully summarises the moves so far. Read the full piece here.
RBS and Lloyds scored three stars in the 2018 Lafferty Banking 500 project. The maximum score is five stars.
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