Bank Negara Malaysia, the central bank of the country, has received a total of 29 applications for digital banking licences.
The central bank made the announcement following the closing of a six month application period.
In a statement, Bank Negara Malaysia said: “A diverse range of parties have submitted applications for the digital bank licence, ranging from banks, industry conglomerates, technology firms, e-commerce operators, FinTech players, cooperatives and state governments.
“Successful applicants that meet all prudential criteria will be expected to contribute towards greater financial inclusion by offering products and services to address market gaps in the underserved and unserved segments.
“This includes promoting suitable and affordable financial solutions by leveraging on innovative application of technology.”
Malaysia is slated to issue up to five licences in the first quarter of next year. The digital lenders in the country will be guided by a simplified regulatory framework during the initial stage of operations.
They will be required to comply with the Financial Services Act 2013 or Islamic Financial Services Act 2013 and other regulations.
Several Asian countries are opening the banking sector for online-only entities amid surge in digital banking. Last year, Singapore issued digital banking licences to four applicants.