Malaysia to issue up to five digital banking licences by Q1 next year

Visual from Bank Negara website

The Malaysian central bank may issue up to five licences for digital banks by the first quarter of 2022.

Bank Negara Malaysia (BNM) said it will adopt a proportionate regulatory framework as well as ask digital banks to observe limits on aggregate asset exposures during the initial years of their operations. These measures are intended to reduce barriers to entry while allowing the bank to observe attendant risks, the central bank said in its annual report 2020 published on Wednesday.

“Successful applicants must demonstrate a strong value proposition focused on the unserved and underserved segments and the ability to meet regulatory requirements to safeguard the stability of the financial system,” the central bank said.

The licensing of new players with innovative business models is expected to serve the economy and contribute to the well-being of Malaysians, the central bank said.

The central bank has issued the Policy Document on Licensing Framework for Digital Banks on December 31, 2020. With the publication of the document, it has begun accepting licence applications until  June 30, 2021, according to its annual report.

Digital players

Malaysia’s move comes at a time when regulators across Asia are opening up the banking industry to digital players, encouraged by higher smartphone penetration and better internet connections.

Central banks and consumers also hope that digital banks, helped by advanced technology, could promote innovation and bring financial inclusion to underserved segments. In Malaysia, apart from e-wallet operators, tech companies and financial institutions, diversified conglomerate Sunway Group and property developer Paramount Corporation Bhd, were said to be interested in applying for the digital banking licenses. 

Ride-hailing and digital payments group Grab, budget airline AirAsia, telco Axiata, gaming company Razer, telecom and tech firm Green Packet Bhd, lenders including CIMB Group, Affin Bank Bhd, Hong Leong Bank Bhd, AMMB Holdings Bhd and Standard Chartered Bank Malaysia Bhd, are reportedly among the companies in the race.

Meanwhile, in its latest annual report, the central bank noted that following the pandemic, there was an accelerated shift towards online financial services. “In 2020, online banking transactions grew by 49% while e-wallet transactions increased by 131% compared with the same period last year.”

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.