Grab and AirAsia are among the 12-plus companies in Southeast Asia hoping to land a digital banking license in Malaysia, Reuters reported on Thursday (July 1), citing sources.
The dozen or so licensing applications include more than 50 companies all vying for digital banking licenses in Malaysia, according to sources. Other firms submitting bids for a banking license in Malaysia by the deadline on Wednesday (June 30) included Axiata and Tencent, Reuters reported.
Malaysian banking licenses have an easy financial entry — roughly $72 million of capital — making it appealing to digital enterprises like FinTechs, money remittance firms and co-operatives representing banks and housing sectors, according to the article.
By way of comparison, Singapore requires banking license applicants to have about S$1.5 billion ($1.1 billion) in paid-up capital for digital banks already operating, or roughly S$100 million for digital wholesale banks, Reuters reported.
The Central Bank of Malaysia indicated that it plans to issue as many as five licenses by early next year.
“Malaysia has many of the characteristics digital banking players are looking for, with a sizable population, large smartphone penetration and young population eager to try out new services,” said Shankar Kanabiran, financial services consulting partner at EY, per Reuters.
The Grab and Singtel joint venture, along with other investors, already got approval for a full digital banking license in Singapore, noted the report.
AirAsia partnered with a consortium for the application via its FinTech unit BigPay, sources said, whereas Axiata teamed up with RHB Bank to apply for the license. Axiata Digital CEO Khairil Abdullah told Reuters last month that many people in Malaysia don’t have credit, which has created a “sizable underserved segment” in the country.
Bank Negara Malaysia, the country’s central bank, announced in April that it was planning to offer five digital banking licenses by the first quarter of next year. Applications closed on Wednesday (June 30).
In January of last year, Malaysia announced that it was planning to give half of its citizens over $110 million to boost digital payment adoption in the country. The program is anticipated to boost eWallet companies such as Grab and Boost.