Volt Bank, Australia’s first online-only challenger bank, has announced it is closing five years after its launch.

The decision to surrender its banking licence comes after the organisation was unsuccessful in raising enough capital to support the business.

The bank said that customers need to withdraw all funds before 5 July 2022, when they plan to start closing accounts.

Volt was one of four challengers banks created after an investigation in 2018 found misconduct in the Australian banking sector, a report by the Financial Times said.

At the time, the Australian government launched a policy which loosened rules to allow digital-first neobanks to compete with incumbents.

“In reaching this difficult decision we have considered all options but ultimately, we have made this call in the best interest of our customers,” said the bank’s chief executive, Steve Weston.

He continued: “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.”

Volt has started to sell its mortgage portfolio and has begun the process of returning deposits to customers in full, stating that it has enough liquidity available to facilitate the process.

The bank has also set all interest rates on accounts to zero.

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