Thursday, 6 October 2022

Five successful applicants for Malaysia's digital bank licences

5 min read

Bank Negara Malaysia (BNM) wishes to announce the five successful applicants for the digital bank licences as approved by the Minister of Finance Malaysia.

A. The following applicants are to be licensed under the Financial Services Act 2013 (FSA):

  • a consortium of Boost Holdings Sdn. Bhd. and RHB Bank Berhad;
  • a consortium led by GXS Bank Pte. Ltd, formed by Singapore-based Grab and Singtel, and Kuok Brothers Sdn. Bhd; and
  • a consortium led by Singapore-based Sea Limited and YTL Digital Capital Sdn Bhd.

B. The following applicants are to be licensed under the Islamic Financial Services Act 2013 (IFSA):

  • a consortium of Japan-based AEON Financial Service Co., Ltd., AEON Credit Service (M) Berhad and MoneyLion Inc.; and

  • a consortium led by KAF Investment Bank Sdn. Bhd.

Three out of the five consortiums are majority-owned by Malaysians namely Boost Holdings and RHB Bank Berhad, Sea Limited and YTL Digital Capital Sdn. Bhd. and KAF Investment Bank Sdn. Bhd.

All 29 applications received were thoroughly assessed pursuant to section 10 (1) of FSA, and IFSA, which require BNM to consider all the factors in Schedule 5 of the Acts and other relevant policy requirements. The assessment criteria cover the character and integrity of applicants, nature and sufficiency of financial resources, soundness and feasibility of business and technology plans as well as ability to meaningfully address financial inclusion gaps. Applications were assessed on their individual merits, as well as relative to other applications based on consistent evaluations of each assessment criteria. This horizontal review is based on the assessment criteria applied across all applicants to determine the relative strength of each application and identify successful applicants.

Throughout the assessment process, BNM instituted strict governance and evaluation procedures to ensure robust, objective and consistent assessments across all 29 applications received. Four levels of assessment were carried out, supported by a cross-functional technical team, a review team and internal independent observers from BNM’s risk and legal departments. The final recommendations to the Minister were deliberated and endorsed by BNM’s Management Committee.

Bank Negara Malaysia Governor Tan Sri Nor Shamsiah said, “Digital banks are expected to further advance financial inclusion. By adopting digital technology more widely for everyday transactions, we can significantly increase opportunities for our society to participate in the economy - by overcoming geographical barriers, reducing transaction costs and promoting better financial management.”

“Digital banks can help individuals and businesses gain better access to more personalised solutions backed by data analytics. As businesses move online, digital banking also provides a safer and a more convenient way to transact,” she added.

Following this announcement, the successful applicants will undergo a period of operational readiness that will be validated by BNM through an audit before they can commence operations. This process may take between 12 to 24 months.

In line with the 5 strategic thrusts stated in the Financial Sector Blueprint 2022-2026, BNM will continue to work with the financial and fintech industries and relevant stakeholders to continuously enhance access to financial services throughout the country and across all segments of society.

 

Re-disseminated by The Asian Banker

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