Chanticleer

Lessons all round as Xinja Bank shuts

The closure of Xinja Bank has raised doubts about neobanks being able to disrupt the banking oligopoly by offering higher deposit rates, lower loan rates and better customer service.

Jan 13, 2021 – 12.00am

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There must be lots of soul-searching going on inside the walls of the Australian Prudential Regulation Authority following the sudden closure of high-profile neobank, Xinja Bank.

Xinja burned through about $98.4 million in shareholder capital by offering some of the highest deposit rates in Australia while failing to offer a loan product that would earn sufficient revenue to sustain the operation.

Tony Boyd is the former Chanticleer columnist. He has more than 35 years' experience as a finance journalist.