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Bank Negara invited applications for digital banking licences and may issue up to five of them to qualified applicants

In a statement yesterday after issuing a policy document on licensing frameworks for digital banks following six-month community consultation, Bank Negara submitted applications for digital banking licenses.

Bank Negara invited applications for digital banking licenses and may issue up to five of them to qualified qualified

It is known that the deadline to apply for business registration for digital banking or Islamic digital banking businesses is June 30, 2021. Licensing notification will be made in the first quarter of 2022.

The central bank said:

“The licensing framework for digital banks aims to enable the innovative application of technology to uplift the financial well-being of individuals and businesses and foster sustainable growth.”

This includes expanding meaningful accessibility and promoting responsible use of appropriate financial solutions for underserved and underserved segments.

The representative of Bank Negara said:

“To achieve these outcomes, a simplified regulatory framework will be applied to digital banks during the initial stage of operations, commensurate with an asset threshold of not more than RM3bil for three to five years.”

The central bank said:

“This functions as a foundational phase for the licensees to demonstrate their viability and sound operations, and for the Bank Negara to observe the performance of the licensed digital banks and attendant risks that arise from their operations.”

During the foundation phase, licensed digital banks will be subject to simpler regulatory requirements related to capital adequacy, liquidity, stress testing, Shariah governance, and public disclosure requirements.

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