KUALA LUMPUR (Reuters) – Malaysian telecoms firm Axiata Group Bhd and RHB Bank Bhd have jointly bid for a digital bank licence, the companies said on Wednesday.
Axiata’s e-wallet unit, Boost Holdings Sdn Bhd, has signed an agreement with RHB to form a consortium to apply for a licence under the central bank’s framework, the companies said in a joint statement.
The announcement confirms a Reuters report on Monday that the companies were teaming up to apply for a digital bank licence.
Boost will own a majority stake of 60%, while RHB will own the remaining in the digital bank, subject to approval from Bank Negara Malaysia, they said.
Malaysia’s central bank has called for digital bank applications by the end of this month, and said it may issue up to five licences for online-only banks. Bank Negara is expected to finalise its decision towards the end of next year.
Regulators in Asia are opening up banking for digital players, encouraged by a boom in mobile connectivity and the prospect of tech firms offering low-cost financial services. The COVID-19 pandemic has increased the need for digital transactions.
Both firms will seek to expand on Boost’s fintech experience developed through its digital micro-financing and micro-insurance provider Aspirasi, and its e-wallet.
The companies said the digital bank consortium would spearhead the group-wide partnership, which was formalised through a memorandum of understanding.
“RHB and Axiata firmly believe that the digital bank will unlock synergistic opportunities to benefit underserved retail customers and micro-SMEs that fall outside the normal focus of traditional banks,” they said, referring to small and medium enterprises.
(Reporting by Liz Lee; Editing by Stephen Coates)