Malaysia's central bank to issue up to 5 digital banking licenses

Friday 3 January 2020 10:56 CET | News

Malaysia’s central bank is set to issue up to five digital banking licenses to qualified applicants looking to conduct either conventional or Islamic banking businesses in the country, according to Tech in Asia.


Bank Negara Malaysia (BNM) unveiled the proposed framework for the licensing of digital banks that intend to offer products and services to address market gaps in Malaysia’s underserved and unserved segments. 

The framework serves as part of a series of measures adopted by the central bank to enable innovative integration of technology to the financial sector, according to a statement. BNM said that it looks to take a balanced approach to enable the admission of digital banks with strong value propositions while securing the stability of the financial system. 

To achieve these outcomes, an asset threshold of not more than 2 billion ringgit [about USD 484 million] in the initial three to five years of operations will be applied. 

The measure serves as a “foundational phase” for licensees to demonstrate their viability and for the bank to measure their performance. 

During this phase, licensed banks will be subjected to simplified regulatory requirements on capital adequacy, liquidity, stress testing, and public disclosure requirements. 

BNM also requires digital banks to maintain minimum capital funds, unimpaired by losses, of 100 million ringgit (USD 24.2 million) and 300 million ringgit (USD 72.6 million) thereafter.


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Keywords: Malaysia, central bank, digital banking, banking licenses
Categories: Banking & Fintech | Payments General
Countries: Malaysia
This article is part of category

Banking & Fintech