Sarawak unsuccessful in getting Malaysia’s digital banking license

Digital banking. Photo credit: Pixabay

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KUCHING, April 30: Sarawak was unsuccessful in its bid to get a digital banking license from Bank Negara Malaysia (BNM).

It was reported on Aug 2, 2021 on Fintech News Malaysia that the Sarawak government had formed a consortium with Kenanga Investment Bank and Revenue Group, named SSG Digital Resources Berhad, to vie for the five Malaysian digital banking licenses that were available.

Premier of Sarawak Datuk Patinggi Tan Sri Abang Johari Tun Openg had in 2020 announced Sarawak’s digital banking ambitions in the quest to transform and move the State forward through an integrated digital economy.

BNM, in a statement yesterday (April 29), has announced the five successful applicants for the digital bank licenses approved by the Ministry of Finance.

BNM said three consortiums of Boost Holdings Sdn Bhd and RHB Bank Berhad; GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd; and Sea Limited and YTL Digital Capital Sdn Bhd will be licensed under the Financial Services Act (FSA) 2013.

Two other consortiums comprising AEON Financial Service, AEON Credit Service Berhad and MoneyLion Inc, as well as KAF Investment Bank will be licensed under the Islamic Financial Services Act 2013.

Three out of the five consortiums are majority-owned by Malaysians namely Boost Holdings and RHB Bank Berhad, Sea Limited and YTL Digital Capital Sdn Bhd and KAF Investment Bank Sdn Bhd.

Following the announcement, BNM said the successful applicants will undergo a period of operational readiness in a process that may take between 12 and 24 months, that will be validated by BNM through an audit before they can commence operations.

BMN received 29 applications which were thoroughly assessed by taking into accounts the character and integrity of applicants, nature and sufficiency of financial resources, soundness and feasibility of business and technology plans as well as ability to meaningfully address financial inclusion gaps.

“Applications were assessed on their individual merits, as well as relative to other applications based on consistent evaluations of each assessment criteria. This horizontal review is based on the assessment criteria applied across all applicants to determine the relative strength of each application and identify successful applicants.

“Throughout the assessment process, BNM instituted strict governance and evaluation procedures to ensure robust, objective and consistent assessments across all 29 applications received.

“Four levels of assessment were carried out, supported by a cross-functional technical team, a review team and internal independent observers from BNM’s risk and legal departments. The final recommendations to the Minister were deliberated and endorsed by BNM’s Management Committee,” the central bank added.

BNM Governor Tan Sri Nor Shamsiah Mohd Yunus emphasised that digital banks are expected to further advance financial inclusion.

“By adopting digital technology more widely for everyday transactions, we can significantly increase opportunities for our society to participate in the economy – by overcoming geographical barriers, reducing transaction costs and promoting better financial management.

“Digital banks can help individuals and businesses gain better access to more personalised solutions backed by data analytics. As businesses move online, digital banking also provides a safer and a more convenient way to transact,” she said in the statement.

In line with the five strategic thrusts stated in the Financial Sector Blueprint 2022-2026, BNM said it will continue to work with the financial and fintech industries and relevant stakeholders to continuously enhance access to financial services throughout the country and across all segments of society. — DayakDaily