Australian Prudential Regulation Authority issues stricter standards for banking licences

Friday 13 August 2021 12:13 CET | News

The Australian Prudential Regulation Authority (APRA) has issued stricter standards for prospective neobanks that apply for banking licences following Xinja’s collapse.

Applicants will need to offer an ‘income-generating asset’, like loans, in addition to a depository product. They also will have to establish contingency plans for financial stress, including exit plans for winding down.

The new regulation covers obtaining a full banking licence, a prerequisite for neobanks to garner funds from the public in Australia. According to eMarketer, the regulator’s move would help to avoid a repeat of Xinja’s demise, which had to return deposits to its customers after burning through its cash. 

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Keywords: neobanks, banking licence, regulation, challenger bank, banks
Categories: Banking & Fintech
Countries: Australia
This article is part of category

Banking & Fintech