[UPDATED] Bank Negara awards digital banking licences to consortiums led by Boost-RHB, Grab-Singtel, Sea-YTL

KUALA LUMPUR – After a month’s delay, Bank Negara Malaysia (BNM) has finally revealed the five successful applicants for the digital banking licences today, with a couple of notable absentees.

In a statement, the central bank said three of the awarded applicants will be licensed under the Financial Services Act 2013 (FSA), while two others will be under the Islamic financial Services Act 2013 (Ifsa).

The three under FSA are the consortiums of Boost Holdings Sdn Bhd and RHB Bank Bhd; GXS Banks Pte Ltd (Grab-Singtel) and Kuok Brothers Sdn Bhd; and Sea Ltd and YTL Digital Capital Sdn Bhd.

The two under Ifsa, meanwhile, are a consortium led by KAF Investment Bank Sdn Bhd and another consortium of Aeon Financial Service Co Ltd, Aeon Credit Service (M) Bhd and MoneyLion Inc.

“Successful applicants will undergo a period of operational readiness that will be validated by BNM through an audit before they can commence operations.”

This process, BNM said, may take between 12 and 24 months to be completed.

Among the applicants previously tipped as frontrunners for the licence but failed to make the cut include the consortium of Capital A Bhd’s BigPay. Malaysian Industrial Development Finance Bhd (MIDF), Ikhlas Capital Master Fund Pte Ltd, and South Korean conglomerate SK Group.

Another big name that failed to get a licence is the joint bid by Angkatan Koperasi Kebangsaan Malaysia Bhd (Angkasa) and Boustead Holdings Bhd, with an independent brokerage company and other partners.

BNM was initially scheduled to name the five successful applicants by the end of March. A total of 29 applications were received.

However, on March 30, Governor Tan Sri Nor Shamsiah Mohd Yunus said the announcement has been postponed to the near future pending the completion of the legal process.

The Vibes had earlier today reported an industry insider as saying that the hold-up in the announcement of the winning applicants is likely due political meddling in awarding the licences.

Another source had said the delay in announcing the recipients has not helped in inspiring investors’ confidence, and instead affirms the regional perception that Malaysia lacks stable government leadership.

BNM assessments on applicants

In its statement today, the central bank said all 29 applications were thoroughly appraised, with four levels of assessments carried out.

The final recommendations to Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz were also deliberated and endorsed by BNM’s management committee, it said.

It added that the assessment criteria include, among others, the character and integrity of applicants, nature and sufficiency of financial resources, soundness and feasibility of business and technology plans, and ability to meaningfully address financial inclusion gaps.

Plans to grant digital banking licences were first announced by BNM in 2020, with clear emphasis that the digital banks will have to cater to the underserved and unserved segments of the population.

Those granted with the licence will have to maintain a minimum amount of RM100 million in capital funds in the foundational phase, which will be further raised to RM300 million by the third year of operations. – The Vibes, April 29, 2022