In the end, the exit of Xinja Bank from the industry will be handled in good order, with all banking services terminated and all depositor funds returned by 15 January 2021.
Rumours that the board of Xinja would either sell the deposit book and client list or hand back its licence have been rife for weeks.
Early yesterday morning, Xinja announced it “will be exiting from banking business and returning its ADI licence” (effectively stopping being a bank).
“Xinja 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,” the bank told clients.
Xinja urged its depositors “to transfer all funds out of your Xinja Bank Account by 6th January 2021. Your debit card or pay facility will cease to function on 15th January 2021.”
APRA said: “Xinja’s decision to exit the banking industry and ultimately relinquish its licence to operate as an authorised deposit-taking institution and pursue other business opportunities is a commercial decision for Xinja.”
Equally, it is clear APRA has been deeply engaged with Xinja’s board since at least March, as the burn rate from the bank’s high yield Stash account and absence of lending product eroded the bank’s capital base.
The lack of any eager buyer for Xinja from a fintech or anyone else seeking to jump the queue for neobank approvals is telling.
Also telling is that it is now more than one year since IN1 Bank received their licence, and showing no signs they will soon be trading.