The Malaysian central bank said on Friday that it would issue up to five licences to qualified applicants to establish digital banks to conduct either conventional or Islamic banking business in Malaysia.
Bank Negara Malaysia said in a statement that it had issued the exposure draft on licensing framework for digital banks, which allowed digital banks to offer banking products and services to address market gaps in the underserved and un served segments.
“Such digital banks are expected to offer meaningful access to and promote responsible usage of suitable and affordable financial solutions to financial consumers,” said the central bank.
According to the statement, the framework formed part of the series of measures adopted by the central bank to enable innovative application of technology in the financial sector.
The central bank also highlighted it had adopted a balanced approach to enable admission of digital banks with strong value propositions while safeguarding the integrity and stability of the financial system as well as depositors’ interests.
To achieve these outcomes, an asset threshold of not more than 2 billion ringgit (about 484.56 million U.S. dollars) in the initial three to five years of operations would be applied.