Volt has taken the decision after its recent capital raising initiatives failed to draw the required capital investment of around A$200mn ($138m) to continue its operations
Volt will shut down its business operations. (Credit: aymane jdidi from Pixabay)
Australian neobank Volt has unveiled its plans to wind down its business operations, return all deposits to the customers and surrender its banking licence.
The company has notified the Australian Prudential Regulation Authority (APRA) about its decision to shut down operations.
Volt Board of Directors has taken the decision after the company’s recent capital raising initiatives failed to draw adequate funds to support the business.
The lender required around A$200mn ($138m) capital raise to continue its operations, but its global capital raising campaign had failed to deliver.
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 Australian neobank is anticipated to return nearly A$100m in deposits to its customers and transfer loans to other banks.
Volt has already executed a transaction to divest its mortgage portfolio and started the process of returning all deposits to customers.
The lender said it has access to the liquidity required to carry out the process of returning funds to the customers.
APRA said that it will closely monitor the return process to ensure funds are returned to depositors in an orderly and timely manner.
In addition, the Australian government guarantees up to $250,000 per account holder under the Financial Claims Scheme.
Volt said that it has taken necessary measures to reduce all expenses, except for those that support the return of deposits and help realise the value of the company’s remaining assets.
In June last year, Volt raised $23.5m in a Series A funding round to support its expansion into new territories and build out its global instant payment footprint.