Grab-Singtel, iFAST apply for Malaysian digital bank license

Bank Negara Malaysia is expected to issue up to five licenses by Q1 2022.

The Grab-Singtel joint venture and Singapore-based investment solutions firm, iFAST Corporation, have separately applied for a digital bank license in Malaysia.

In separate announcements, the two entities said that they have submitted applications for a digital bank license to Bank Negara Malaysia. Malaysia’s central bank is expected to issue up to five digital bank licenses by the first quarter of 2022.

The Grab-Singtel consortium is one of the successful applicants granted a digital bank license by the Monetary Authority of Singapore.

In a press release, iFAST revealed that it will own a 40% stake in its proposed digital bank if the application is successful, whilst the beneficial equity ownership of the consortium will be approximately 57% Malaysian.

Lim Chung Chun, chairman and CEO of iFAST, said that the planned iFAST Bank is targeting the unserved and underserved market segments such as the Bottom 40% population in Malaysia.

“In the last 20 years, we have seen how Internet-based business models have massively transformed the world. Internet-based businesses have become the strongest and biggest companies in the world, because the borderless nature of the Internet allows these companies to operate truly global business models,” Lim said in the press announcement.

He noted that in the financial sector including in banking, the emergence of truly global fintech business models has lagged behind other industries such as e-commerce, video streaming, music, and media. Instead, truly global fintech businesses’ are businesses that can tap into the global customer base without having to set up offices and branches in various countries around the world.

“The development of ‘truly global fintech businesses’ has lagged behind because financial sector regulations of various countries tend to slow down the efforts of most financial institutions in creating global Fintech businesses. There is now an opportunity for a Malaysia digital bank to make a substantial contribution to the global digital banking and fintech scene,” Lim added.