Australian neobank Xinja Bank is planning to return its authorised deposit-banking institution (ADI) licence and withdraw its transaction and savings account products.

As a result of this move, the digital-only lender said that it will return over A$500m ($377.8m) in deposits to its customers and exit the Australia market.

The Australian Prudential Regulation Authority (APRA), the country’s banking watchdog, will monitor the return of deposits by Xinja.

APRA will ensure the depositors receive their money in an “orderly and timely manner”, the bank said.

The bank added that it has already begun the process of returning the customers’ deposits and this process will continue for the next two weeks.

Under the product terms, Xinja Bank is giving customers a seven-day notice before closing the ‘Stash’ savings accounts.

It will urge the customers to quickly transfer their funds out of these accounts during this period.

Customers can use the Xinja app or contact the support teams to make the transition.

By 23 December, the savings accounts will be shut and by January 2021, Xinja’s debit card and payment services will also be stopped.

Xinja Bank, which was founded in 2017 and secured its licence last year, is blaming the Covid-19 pandemic for its failure to attract investors and continue its business in the country.

The company said that it now aims to focus on its US trading platform Dabble.

Xinja said: “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.

“We hope to refocus the business in other areas such as our US share trading product, Dabble, should circumstances allow.”