Malaysia-based advisory firm V Capital Investments Ltd has teamed up with US-based fintech solution provider Cross River Bank to work towards applying for a digital bank licence in Malaysia.
Following the 2018 round of financing led by KKR with the participation of Battery Ventures, Andreessen Horowitz, Ribbit Capital & Credit Ease; Shefa Capital has partnered with V Capital to lead the Series C pre-IPO US$100 million investment in Cross River Bank which is slated for an IPO in the US next year.
Through this round of investment in Cross River Bank, V Capital has also become its strategic partner in the Southeast Asia region.
“With the fintech offerings made available through this partnership, V Capital is also working toward the application for a digital bank license in Malaysia. This will allow V Capital to offer its fintech offerings to a larger section of the public,” V Capital said in a statement on PR newswire.
The partnership with Cross River Bank will bring some of the latest technology that western fintech has to offer, with resources, market reach and technical know-how in Southeast Asia provided by V Capital Investment, said V Capital chairman Mohamad Fuzi Harun.
“This partnership will ensure that V Capital Investment and Cross River Bank will be the leading players in the Southeast Asian fintech ecosystem in the next five years,” he said.
Last week, diversified conglomerate Sunway Berhad announced that it is acquiring a 51 per cent stake in credit reporting agency Credit Bureau Malaysia (CBM), marking its foray into the fintech space. The group also aims to secure a digital banking licence.
Bank Negara Malaysia has in March issued an updated exposure draft on the Licensing Framework for Digital Banks that incorporates a proposed simplified regulatory framework applicable during the foundational phase for such banks.
Due to the disruptions caused by the COVID-19 outbreak, the central bank has extended the consultation period for the exposure draft from April 30 to June 30, 2020. Applications for new licences will be open upon issuance of the policy document, the regulator said.
Quoting sources, Reuters reported in January that ride-hailing group Grab, gaming firm Razer, low-cost carrier AirAsia, telecom firm Axiata and lender CIMB are among those looking to apply for digital banking licences in Malaysia. Late last year, the central bank had said that up to five such licences may be issued to qualified applicants.