The central bank of Malaysia has announced that five applicants have been awarded digital banking licenses. 

A group led by Grab Holdings’ digital bank joint venture GXS Bank, RHB Bank and a consortium led by Sea were among those who have secured the digital banking authorisation.

Out of the 29 applications, the KAF Investment Bank-lead group and a venture that includes AEON Financial Service, AEON Credit Service (M) Berhad and MoneyLion were also awarded the licence. 

Like the Philippines and Singapore, Malaysia’s move is aimed at promoting access to financial services by allowing digital and non-banking firms to operate in the banking space. 

Bank Negara Malaysia governor Tan Sri Nor Shamsiah said: “By adopting digital technology more widely for everyday transactions, we can significantly increase opportunities for our society to participate in the economy – by overcoming geographical barriers, reducing transaction costs and promoting better financial management. 

“Digital banks can help individuals and businesses gain better access to more personalised solutions backed by data analytics. As businesses move online, digital banking also provides a safer and a more convenient way to transact.”

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Of the five groups that were authorised, three are majority-owned by Malaysian entities.

Following the announcement, the five applicants will go through a period of operational readiness before they can start operations. 

Grab allied with Singtel and Kuok Brothers to bid for the licence, while Sea joined forces with Malaysian conglomerate YTL Digital Capital. 

Notably, the Grab-Singtel consortium and Sea also have a licence to operate a digital bank in Singapore