Malaysian companies are racing to meet the deadline for digital banking license applications set by Bank Negara Malaysia for the end of June 2021, and RHB Bank is the latest to bid for one of five licenses the central bank is prepared to grant.
RHB Bank, which has formed a consortium with telecom Axiata Group and its subsidiary e-wallet Boost Holdings for the license application, is set to leverage the success of its Islamic banking unit’s offerings to provide Shariah financial products through its planned digital bank, IFN has learned.
Boost Holdings will hold a majority stake of 60% while RHB will own the remaining 40% in the digital bank, which will be an extension of RHB’s strategy to increase financial inclusion and an expansion of Boost Holdings’s fintech experience in digital microfinancing and microinsurance services.
“(The partnership) is the culmination of a strong relationship seeded since 2018 with RHB that has seen fruitful partnerships between RHB Islamic Bank and Boost e-Wallet,” Axiata said.
The RHB–Axiata partnership follows the forming of a similar consortium in March 2021 by Islamic fintech companies MyMy and Sukaniaga, which runs a cooperative financing portal, to also bid for a digital banking license.
More recently, fintech company Pertama Digital has also reportedly partnered with digital banking solution provider INFOPRO, whose flagship product serves the Islamic banking sector, to apply for a digital banking license as well.
The central bank released its long-awaited digital banking regulations late last year, announcing the application period to end on the 30th June 2021 with the successful applicants to be revealed in March 2022. The RHB–Axiata team anticipates at least 18 months of development after a successful application before its digital bank can start operations.