Bank Negara Malaysia (BNM) governor Tan Sri Nor Shamsiah Mohd Yunus had shared more details on the assessment and selection of the five consortia for digital bank licences.
She said that the entry of digital banks is part of a broader vision we have for the financial sector. In our recently published Financial Sector Blueprint, a key theme that we emphasised was “finance for all”.
Shamsiah said that RHB, YTL, Aeon Credit are among the five winning digital bank licence for Bank Negara, this is about making sure that customers have a wide array of choices in financial services to meet their specific circumstances and needs.
In this way, she said that the entry of digital banks is expected to spur the introduction of innovative business models and new products and services.
She said that with a more dynamic banking sector, the needs of all segments of the economy will, in turn, be better served – not just today, but into the future. “.
On the process and criteria for licensing the digital banks, Shamsiah said that the criteria that Bank Negara used in assessing these applications are not arbitrary. They are laid out in the Financial Services Act 2013 and Islamic Financial Services Act 2013.
“The primary consideration in the assessment is the ability of these digital banks to operate in a safe and sound manner and provide a strong value proposition to drive financial inclusion so as to benefit Malaysians, “ she said.
On Bumiputera participation, she said that two consortia, namely Boost-RHB and KAF Investment Bank, are majority-owned by Bumiputera. Meanwhile, the other successful consortia also have Bumiputera shareholding.
She said generally, Bumiputera shareholding in the financial system is also significant, at 43.5 per cent, higher than that seen in other economic sectors.
The financial sector also provides employment for many Bumiputera, with many holding leadership positions in our financial institutions: 54 per cent of chief executive officers (CEOs) and 50 per cent of board members are Bumiputera.
On why the number of licences was a few, she said that there are no plans to issue any more licenses than the five announced adding that its focus is to ensure that digital banks can begin operations without delay so that they start delivering on their promised value propositions to serve the needs of the unserved and underserved segments.
She said that in deciding to award five licenses, BNM considered many factors, such as the size of our banking system relative to the economy. This isn’t a case of “the more the merrier!”.
