Malaysia central bank to issue up to five digital bank licences to address ‘underserved and unserved segments’

Malaysia’s central will allow up to five licences for digital banks to conduct either conventional or Islamic banking, it said in a statement on Friday (Dec 27).

Bank Negara Malaysia on the same day issued an exposure draft on licensing framework for digital banks and application procedures for new licences under the Financial Services Act 2013 and the Islamic Financial Services Act 2013.

It said the exposure draft outlines the proposed framework for the licensing of digital banks to offer products and services to address market gaps in the underserved and unserved segments.

“Such digital banks are expected to offer meaningful access to and promote responsible usage of suitable and affordable financial solutions to financial consumers,” said the central bank.

The authority said digital banks will be required to maintain a minimum capital funds of 100 million ringgit ($24.29 million) during the foundational phase and 300 million ringgit thereafter.

The exposure draft and application procedures can be found in this link. Closing date for all feedback is Feb 28, 2020.

($1 = 4.1177 Malaysian ringgit)

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