The Central Bank of Brazil has liquidated lender Banco Neon citing breach of regulations as well as suspended the operations of the associated digital bank Neon Pagamentos.
Neon Pagamentos used Banco Neon infrastructure to process checking accounts, reported Reuters. However, it was not liquidated.
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The central bank stated Banco Neon was liquidated for breaching legal and regulatory norms as well as for its weak financial condition.
Following the decision, Neon Pagamentos is prohibited from opening new accounts, while the accounts of its current users can be blocked.
In a statement, Neon Pagamentos said it is currently looking for a new banking partner to resume its operations.
It also added the customers can withdraw cash from the payment accounts, but other services such as transfers, credit cards and interest-yielding deposits are suspended.
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By GlobalDataLast week, Neon raised $22m in the Series A funding round that was joined Propel Venture Partners, Monashees, Quona Capital, Omidyar Network, Tera and Yellow Ventures.
Currently, the digital bank has more than 600,000 customers across Brazil and employs nearly 190 people.
