Powered by MOMENTUM MEDIA
the adviser logo
Lender

Bank relinquishes banking licence

by Annie Kane5 minute read
Bank relinquishes banking licence

A fintech is set to return money to its depositors and relinquish its ADI licence as it moves to “focus on other areas”.

Xinja Bank (Xinja) was first authorised to operate as a restricted ADI in December 2018 and was granted a full banking licence by the Australian Prudential Regulation Authority (APRA) in September last year.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

While the bank had launched deposit accounts, it had not yet started offering lending products. Earlier this year, the lender announced that it had ceased offering its savings product to new customers in a bid to ease funding pressures and preserve its savings rate. It then undertook capital raises in order to gain more funds.

However, it has now announced that it has decided to discontinue the Xinja bank account Stash Account and all services relating to these products in order to focus on other areas such as its US share trading product, Dabble, should circumstances allow.

Advertisement
Advertisement

As part of this decision, Xinja has said that it will be exiting from banking business and returning its banking licence. 

Customers have already ceased earning interest on Stash accounts and instant top-ups are no longer available.

Stash accounts will be automatically closed and balances transferred to Xinja bank accounts on Wednesday, 23 December, the bank said. It is urging customers to cancel any direct debits/ongoing payments as soon as possible.

All empty bank accounts will then be automatically closed from 30 December, with customers being urged to empty their Xinja bank accounts by 6 January 2021.

Xinja debit cards and payment facilities will cease to function on 15 January 2021.

Customers are covered by the government’s Financial Claims Scheme, a government-backed safety net for deposits of up to $250,000 per account-holder per bank.
“After a year marked by COVID-19 and an increasingly difficult capital-raising environment, and following a review of the market in Australia, Xinja has decided to withdraw the bank account and Stash (savings) account and cease being a bank,” Xinja said in a statement.
“This was an incredibly hard decision.

“We hope to refocus the business in other areas such as our US share trading product, Dabble, should circumstances allow.”

APRA said it had noted Xinja’s announcement, adding: “Xinja’s decision to exit the banking industry and pursue other business opportunities is a commercial decision for Xinja. 

“As Australia’s financial safety regulator, APRA will closely monitor the return of deposits to ensure all funds are returned to Xinja depositors in an orderly and timely manner.”

[Related: ‘Essential’ brokers advising Xinja on mortgage strategy]

Bank relinquishes banking licence
money au ta
TheAdviser logo
money au ta

Annie Kane

Annie Kane

AUTHOR

Annie Kane is the editor of The Adviser and Mortgage Business.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

daniel tuttlebee resimac asset fInance ta l27zun

Resimac takes controlling stake in Sonder

Resimac Asset Finance has expanded its acquisition stake in equipment finance business Sonder Equipment Finance...

READ MORE
asic ta 2

ASIC seeks ‘common-sense solutions’ to breach reporting

The Australian Securities & Investments Commission (ASIC) has committed to “improving” the operation of the...

READ MORE
andrew mills homestart ta htfetw

HomeStart drops graduate loan deposit to 2%

HomeStart Finance, a non-bank lender backed by the South Australian state government, has lowered the deposit hurdle...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more