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APRA extends neobank’s restricted banking licence

The prudential watchdog has granted Sydney-based challenger in1bank an extension for its restricted banking licence.

APRA reported that it had decided to grant the extension as the “extraordinary circumstances of COVID-19 and APRA’s revised approach to supervising new banking entrants… were beyond its control”.

The regulator has insisted that it does not view the decision as setting a precedent for other future restricted authorised deposit-taking institutions (ADIs), but it has said it will consider licence extensions where necessary.

In1bank is currently the only restricted ADI in Australia.

APRA had granted the licence in December 2019 to the bank formerly known as BDB Corp. It was founded by Chinese investment banker James Tong.

The restricted ADI licence allowed it to hold up to $2 million in deposits of less than $250,000 each, with APRA also imposing limits on the level of tier one capital, assets and liabilities, and the assets held on the balance sheets of licensees.

In1Bank was among a wave of challenger banks that were granted licences in 2019, joining the likes of the now shuttered Xinja, as well as Volt Bank, 86 400 (which has since sold to NAB) and Judo Bank.

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[Related: APRA writes to lenders on home loan risks]

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