BNM receives 29 digital bank applications

by ASILA JALIL

Bank Negara Malaysia (BNM) received 29 applications for the digital banking license during the six-month application period which ended on Wednesday.

The central bank said various parties including those from state governments had applied for the license which will be awarded to five operators.

“Bank Negara Malaysia announced today that it has received 29 applications for a digital bank licence under the Financial Services Act 2013 and the Islamic Financial Services Act 2013, following a six-month application period, which ended on June 30, 2021.

“A diverse range of parties have submitted applications for the digital bank licence, ranging from banks, industry conglomerates, technology firms, e-commerce operators, FinTech players, cooperatives and state governments,” said BNM in a statement recently.

It added successful applicants that meet all prudential criteria will be expected to contribute towards greater financial inclusion by offering products and services to address market gaps in the underserved and unserved segments.

Among the initiatives that the bank expects from the digital banks include promoting suitable and affordable financial solutions by leveraging on innovative application of technology.

“Up to five licences may be issued and notification of successful applications will be made in the first quarter of 2022,” said BNM.

Among notable groups that have applied for the license include Axiata Group Bhd and RHB Banking Group Bhd. Axiata’s subsidiary Boost Holdings Sdn Bhd and RHB signed a comprehensive heads of agreement last month to form a consortium for the application.

The parties stated Boost Holdings will hold a majority stake of 60% while RHB will hold the remaining 40% in the digital bank.

According to news reports, property-to-medical conglomerate Sunway Bhd had teamed up with Chinese fintech firm Linklogis Inc and Bangkok Bank PLC to apply for the license.

Sunway had recently acquired a 51% stake in Credit Bureau Malaysia which the group stated would enable it to achieve its goal of building a financial technology ecosystem and securing a digital banking license.

AEON Credit Service (M) Sdn Bhd and AEON Financial Service Co Ltd (AFS) are also the contenders for the license as they have submitted a joint application to the central bank to operate a digital bank in the country.

In a bourse filing they stated AEON Credit will hold a 40% stake in the venture while AEON Financial Service holds the remaining 60%.

Paramount Corp Bhd submitted an application to the central bank for the license as the lead applicant for a consortium which also includes Star Media Group Bhd, Prosper Palm Oil Mill Sdn Bhd, RCE Capital Bhd and a technology partner.

AirAsia Group Bhd’s e-wallet unit BigPay entered the digital banking bid with Malaysian Industrial Development Finance Bhd (MIDF) and Ikhlas Capital Master Fund Pte Ltd.

BigPay CEO and co-founder Salim Dhanani said the license would enable the group to provide accessible financial services to individuals and micro-small and medium enterprises with transparent fees.