Singapore’s largest telco Singtel and its digibank partner Grab has applied for a digital bank licence in Malaysia.
Singtel made the announcement on the Singapore Exchange, adding that the application was made together with a consortium of other investors.
Based on the guidance provided by Bank Negara Malaysia, Singtel said the country’s central bank is expected to issue up to five digital bank licences by the first quarter of next year.
Grab-Singtel digibank
The Grab-Singtel consortium was one of the winners of Singapore’s digital full-bank licence bid last year. The consortium has been given the green light by the local central bank to operate a digital bank in Singapore.
The other group that bagged the bid for a digital full-bank licence was consumer Internet company Sea Group. These digibanks are expected to emerge onto Singapore’s banking scene early next year.
For Malaysia, big names that had indicated their desire to apply for a licence include telecommunications giant Axiata through a tie-up with local bank RHB Group and budget airline AirAsia via its financial app BigPay.
Sea is also said to be interested in a digibank licence in Malaysia too.
Focus on unserved and underserved customers
The Malaysian central bank is pushing for the adoption of digital transactions, as going cashless has gained importance amid the pandemic.
The target group will be the unserved and underserved, including those who have higher risk profiles, low financial literacy, or limited understanding on how to access financial services.
Bank Negara Malaysia is expected to issue the licences with an asset threshold of no more than 3 billion ringgit (US$722.6 million) for the first three to five years of operations.
The limit will be removed after that, and the digibanks will subject to similar regulations as traditional banks.
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Featured Image Credit: Reuters / Singtel
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