30 March 2020
On 3 March 2020, Bank Negara Malaysia (“BNM”) issued an updated exposure draft on the Licensing Framework for Digital Banks (“exposure draft”). The exposure draft sets out the proposed framework to allow entry into the Malaysian market of digital banks with innovative business models that seek to serve the underserved and unserved market segments. Licensing of these new players with innovative business models is expected to add dynamism to the banking landscape to serve the economy and contribute to individual well-being. This includes expanding meaningful access to and responsible usage of suitable and affordable financial solutions for the underserved and unserved market segments.
Licensed banks and licensed Islamic banks may apply for a digital bank licence separate from their current licensed entity should they wish to carry on digital banking business or Islamic digital banking business in a joint venture with other parties. It should be noted that licensed banks and licensed Islamic banks are able to digitalise their current business operations, which remains within the scope of their existing banking licence and does not require the application of a separate digital bank licence.
The consultation closes on 30 April 2020.