Xinja Bank withdraws deposit accounts and will hand back ADI licence

By Edil Corneille

Australia’s Xinja Bank announced its plans to withdraw its Transaction and Savings account products and return its ADI licence.

“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. This was an incredibly hard decision”, Xinja said. “We hope to refocus the business in other areas such as our US share trading product, Dabble, should circumstances allow.”

In a media release, Xinja mentioned that it is already safely executing the return of customers’ deposits, which will continue over the next couple of weeks. The Australian Prudential Regulation Authority (APRA) is closely monitoring Xinja’s return of deposits to ensure that funds are returned in an orderly and timely manner.

Under the terms of the product, Xinja is giving its customers the required 7-day notice before closing the Stash Account and will be encouraging them to transfer any funds out of bank accounts as soon as possible. The Xinja App and support teams will be available to help customers make the transition during this period.

In November, Xinja apprised that its first deadline was in September to provide access to its product data (the details of Xinja’s bank account and Stash account) via an API, so that this could easily be accessed by third party providers (TPPs). Xinja had mentioned that by July 2021, it needs to make customers’ data available, again via the API and according to open banking standards, at the request of the customer, to third parties who are accredited ‘recipients’. For example loan companies or services automatically pulling relevant data to assess an applicant.