Malaysia Awards Digital Bank Licenses To Groups Led By Grab, Sea, RHB

The Malaysian central bank has awarded digital banking licenses to groups led by ride hailing and food delivery giant Grab Holdings, Shopee owner Sea Group and Malaysian lender RHB Bank, as the Southeast Asia nation seeks to embrace online financial services amid an e-commerce boom.

A total of five licenses were issued by the regulator after receiving about 29 applications for the much-coveted licenses. Groups led by AEON Financial Service and KAF Investment Bank-led were also granted the permits.

“Digital banks can help individuals and businesses gain better access to more personalized solutions backed by data analytics,” Bank Negara Malaysia Governor Nor Shamsiah said in a statement on Friday. “As businesses move online, digital banking also provides a safer and a more convenient way to transact.”

Grab has partnered with Singapore telecom giant Singtel and billionaire Robert Kuok’s Kuok Brothers for the Malaysian digital bank bid. The consortium has appointed industry veteran Pei Si Lai, who previously worked for over two decades at Standard Chartered Bank, to lead the venture, which aims to hire more than 200 staff before launching the services in the country.

“The Malaysia digital bank consortium is honored to be given the opportunity to build a next-generation digital bank and drive access to financial services for underbanked Malaysians,” said Reuben Lai, senior managing director of Grab Financial Group.

Grab and Singtel are also partners in building a Singapore digital bank, which the group intends to launch later this year. Their rival Sea is also preparing to launch a Singapore digital bank.

For the Malaysian bank license, Sea partnered with a unit of YTL Corp., a Malaysian conglomerate controlled by tycoon Francis Yeoh. RHB, Malaysia’s fourth-largest lender, tied up with mobile carrier Axiata Group’s Boost Holdings.

Malaysia is embracing online financial services after Singapore and the Philippines awarded digital banking licenses in recent years as regulators seek to broaden financial inclusion across the region. Some 290 million people in Southeast Asia do not have formal banking accounts, suggesting a huge untapped market for digital banks, Fitch Ratings said in a 2020 report.