India-based neobank Fi has discontinued its banking services, ending a four-year partnership with Federal Bank and redirecting customers to the bank's own app.
Customers who held savings accounts through the Fi app are being directed to access their accounts via FedMobile, Federal Bank's own mobile banking application.
Fi launched its app-based banking service in partnership with Federal Bank in 2021, targeting younger users with digital savings accounts and money management tools. Founded in 2019 by former Google Pay India executives, the India-based startup reported having served more than 3.5 million customers and processed over one billion transactions across its platform. It raised approximately USD 169 million over five funding rounds, with backers including Ribbit Capital, B Capital, Alpha Wave Global, and Peak XV Partners.
Partnership ends as both sides realign
According to the announcement, customers received communications from both Fi and Federal Bank this week confirming the termination of the arrangement. Fi's message, reviewed by TechCrunch, stated that the savings accounts held with Federal Bank remain active and fully operational, and that user funds are unaffected. Federal Bank separately informed customers that the partnership was concluding as part of a 'business re-alignment', and that only the access channel, not the account itself, was changing.
New users can no longer open savings accounts via the Fi app, which now displays a message indicating the feature is no longer available. Neither Fi nor Federal Bank responded to requests for comment at the time of reporting.
Strategic shift towards enterprise AI
The discontinuation of banking services does not represent a full closure of Fi as a company. Last month, a Fi co-founder outlined a revised strategic direction in a public LinkedIn post, stating that the company intended to focus on building deep technology and AI systems for startups and large enterprises. The post acknowledged that certain products would be sunset as part of this transition.
Fi operated in a competitive segment of India's fintech landscape, alongside players such as Jupiter, Open, and Slice. The winding down of its consumer banking proposition marks a significant departure from the model on which it was founded, though the company has indicated it intends to continue operating in a different capacity.
The move reflects broader tensions within India's neobanking sector, where several platforms built on partnerships with licensed banks have faced questions about sustainability, differentiation, and the long-term viability of intermediary models as banks develop their own direct digital channels.
