India-based neobank Fi has ceased its banking operations, bringing to an end a four-year collaboration with Federal Bank and guiding customers to use the latter’s app for account management.

Existing savings accounts through the Fi platform are now accessible via FedMobile, Federal Bank’s mobile banking application. Customers were informed by both parties about this change in their respective communications.

In 2021, Fi launched its app-based banking service as a joint venture with Federal Bank, focusing on digital savings accounts and money management for younger users. Founded by former Google Pay India executives in 2019, Fi reported serving over 3.5 million customers and processing more than one billion transactions. The startup secured approximately $169 million across five funding rounds from investors such as Ribbit Capital, B Capital, Alpha Wave Global, and Peak XV Partners.

Business Reorientation by Both Sides

The partnership was terminated following a ‘business re-alignment’ at Federal Bank. While the accounts remain active with no impact on user funds, new customers are unable to open savings accounts through Fi.

Fi’s co-founder recently highlighted a shift in strategic direction on LinkedIn, indicating that the company would now concentrate on developing deep technology and AI systems for startups and enterprises. Certain consumer products are expected to be phased out as part of this transition.

Implications in India’s Fintech Sphere

This move signals a significant change from the neobanking model on which Fi was founded. While it does not represent a complete closure, the company aims to continue operating in a new capacity. The discontinuation of its consumer banking services reflects broader challenges faced by India’s neobanking sector, where platforms relying on partnerships with banks are grappling with sustainability and differentiation.