FinTech: Australian Neo Bank Volt Returns Deposits, To Hand Back Banking License

July 25, 2022 | FinTech, News

The Aussie neo bank decided to shut down its services in late June.

The Australian Prudential Regulation Authority (APRA) notes that Australian digital bank Volt Bank (Volt) has refunded its customers’ deposits. The process began on June 29 when Volt declared it would no longer be a bank and that it would return its ADI licence to APRA. (Finance Magnates)

Volt failed to raise enough money to support its operations because it did not receive enough investment. It raised almost AU$85 million last year and was looking to raise another AU$200 million from the market last February. The neobank was developing a ‘banking-as-a-service’ infrastructure that partners could use to offer loans and deposits to customers. However, it needed technology that required capital for development.

On June 29, the bank had 5730 deposit accounts with a total value of $107 million. Following the closure announcement, most of these deposits were moved to other banks.

Volt moves remaining accounts to NAB

The remaining 441 accounts with a total deposit value of $113,073 have now been transferred to NAB (ASX: NAB) by Volt voluntarily. APRA closely monitored the return of deposits process, and the transfer of deposits to NAB has been approved by APRA pursuant to its statutory powers under the Financial Sector (Transfer and Restructure) Act 1999 and Banking Act 1959.

In 2019, three digital challenger banks received banking licenses in Australia, including Volt. Two of them, including Volt, shut down services, while one was acquired by the NAB. The stock of the remaining digital bank, Judo (ASX: JDO), is trading near all-time lows.

Following Volt’s closure, about 140 staff were left without a job.

Related Story: UK Online Bank Starling Ends European Ambitions, Pulls Banking Application

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