Xinja says farewell as all customer deposits returned

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on January 19, 2021
Xinja says farewell as all customer deposits returned

Neobank Xinja has completed its return of all customer deposits, ahead of returning its banking license in a few weeks' time.

Xinja, which turned one year old just a few days ago, has returned almost all (99.97%) of its $252 million in cash deposits to its 37,884 customers. 

This follows its decision to pull the plug on its bank account products and hand in its banking license in December last year, and according to the Australian Prudential Regulation Authority (APRA), this is the first time an Australian ADI had undertaken a return of deposits to its customers. 

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            Xinja offered some of the highest deposit rates in Australia at the time of its launch, but failed to provide a home loan product to earn interest on these deposits, which left it bleeding money. 

            No comment has been left by a Xinja spokesperson - CEO Eric Wilson has been hard to reach since the announcement - but it did say in a note on its website today that the remaining $65,000 (0.03%) of deposits that has not yet been claimed will be transferred to a transaction account created for each customer at NAB (National Australia Bank), with APRA's approval. 

            Both Xinja and NAB have contacted affected customers to advise them of the transfer, and APRA will closely monitor the remaining amounts. 

            Xinja customers with deposits sent to NAB can leave their funds there or transfer them to another bank of their choice, and should contact NAB at nab.com.au/contact-us

            Xinja: A timeline 

            Despite the failure of Xinja, CEO at FinTech Australia Rebecca Schot-Guppy told Savings.com.au in December that Australia's neobank sector is still strong. 

            "Up, 86400 and Revolut continue to add new products and gain market traction. When Loot pulled out of banking in the UK, it served to strengthen the rest of its neo-banking sector," Ms Schot-Guppy said. 

            "We expect to see something similar in Australia."


            Photo by Renee Fisher on Unsplash

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            William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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