The bank will also return all deposits to its customers and return its banking licence to the regulator
Volt has commenced the process of returning all deposits to customers. (Credit: Tech Daily on Unsplash)
Australia’s online-only bank Volt has revealed that it would shut down following unsuccessful attempts to raise sufficient funds to support the business.
The bank has informed the Australian Prudential Regulation Authority (APRA) of its plans to close its deposit-taking business. Currently, it has more than 6,000 customer deposit accounts.
It will also return all deposits to its customers and return its banking licence to the regulator.
The digital bank held A$113m ($78m) in deposits and A$80m of home loans as of April this year, Reuters reported, citing the government data.
Volt CEO Steve Weston said: “In reaching this difficult decision we have considered all options but ultimately, we have made this call in the best interest of our customers.”
“The entire Volt team is deeply disappointed to have reached this point. We are enormously grateful to everyone who believed in what we were trying to achieve and worked tirelessly to make Volt a success.”
The bank stated that it has commenced the process of returning all deposits to customers and has required liquidity to undertake the process.
It has also entered into a transaction to sell its mortgage portfolio.
In June last year, Volt acquired non-bank fintech Australian Mortgage, as part of its efforts to offer a digital mortgage solution.
The bank stated: “Volt is doing everything possible to return the deposits in an orderly and timely manner. The Australian Prudential Regulation Authority (APRA) is closely monitoring this process.
“In addition to this, deposits are protected under the Australian Government Financial Claims Scheme which guarantees deposits up to $250,000 per account holder.”
Volt is the second neobank to collapse in Australia after Xinja made an announcement to return its banking licence last year.
Xinja had 37,884 customers at the time it revealed its intentions to hand over the licence, TheAdviser reported.