KUALA LUMPUR – Axiata Group Bhd and RHB Banking Group are confident that their newly-formed consortium (Digital Bank) stands a high chance of clinching one of digital banking licences to be issued by Bank Negara Malaysia (BNM) by the first quarter (Q1) of 2022.
Backed by strong value propositions and right partnership, they said the consortium was expected to be among the companies that would qualify to offer digital bank services in the country.
Axiata’s subsidiary Boost Holdings Sdn Bhd, a top three e-wallet provider in Malaysia, will own about 60% equity interest in Digital Bank while RHB will hold the remaining 40%.
RHB Banking group managing director and chief executive officer (CEO) Datuk Khairussaleh Ramli said Digital Bank, which is yet to be given an actual name, would leverage on Boost’s extensive financial technology experience developed through Aspirasi – a digital micro-financing and micro-insurance provider – alongside RHB’s track record of compliance in running a profitable bank.
“We have seen certain countries such as South Korea and Hong Kong where the traditional banks are also the shareholders of the digital banks.
“This is not something new. (We have the) expertise and experience on the table to make our bid successful,” he told a virtual press conference after announcing the partnership here today.
In its Annual Report 2020, BNM said it might issue up to five licences for digital banks to qualified applicants by Q1 2022.
According to the central bank, the licensing framework for digital banks aims to enable the innovative application of technology to uplift the financial well-being of individuals and businesses and foster sustainable growth.
This includes expanding meaningful access to and promoting responsible usage of suitable financial solutions to unserved and underserved segments.
The application submission would be closed on June 30.
Axiata president and group CEO Datuk Izzaddin Idris said the Axiata-RHB digital bank would unlock synergistic opportunities to benefit underserved retail customers and micro-small and medium enterprises that fell outside the normal focus of traditional banks.
He noted that the initial paid-up capital for the consortium was about RM100 million.
Commenting on the possibility of adding new partners, he said both RHB and Axiata planned to limit the consortium to just two core members for the time being, but it was a matter that both parties could mutually consider and agree on down the road. – Bernama, June 2, 2021
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