As a refresher, a digital bank would deliver all or most of the services offered by a traditional bank but exclusively online through apps accessible by phones, tablets, and PCs. Many industry observers see digital banks as potential competitors to their traditional counterparts in the long term.
This latest announcement from BNM comes after Singapore awarded four digital bank licenses to non-bank entities in December last year. Competition for a digital banking license in Malaysia is expected to be intense with interested parties including big names like Grab, Razer, and AirAsia.
According to BNM, successful applicants would have to adhere to a simplified regulatory framework during their initial stage of operations (called a “foundational stage”). During that stage, lasting three to five years, they would have their assets limited to RM3 billion. They would also have to “maintain at all times a minimum amount of capital funds of RM100 million unimpaired by losses.”
Obviously, there are many more conditions listed by BNM. Read them here in full [pdf] if you’re interested.