Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
Issue 1 - Jan/Feb/Mar 2021
 

Licensing Framework for Digital Banks

On 31 December 2020, Bank Negara Malaysia ("BNM") issued the Licensing Framework for Digital Banks policy document ("Licensing Framework"), together with a set of Frequently Asked Questions. The Licensing Framework has been developed for digital banks to provide banking products and services to the underserved or unserved market, wholly or almost wholly through digital or electronic means.


The Licensing Framework sets out, amongst others, (i) the eligibility requirements and application procedures for applicants; and (ii) the business limitations, regulatory requirements, and business activities that must be undertaken by digital banks. To enable the admission of digital banks with strong value propositions without compromising the integrity and stability of the financial system and depositors' interests, BNM has imposed certain safeguards on the initial operations of digital banks such as requiring licensed digital banks to operate with an asset limit for the first three to five years of operations.


The Licensing Framework came into effect immediately upon issuance, and interested applicants have until 30 June 2021 to submit the licence applications. BNM targets to notify successful applicants (limited to five licences in the initial rollout) in the first quarter of 2022.




Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.

 

Christopher & Lee Ong
Level 22, Axiata Tower ,
No. 9 Jalan Stesen Sentral 5
Kuala Lumpur Sentral,
50470 Kuala Lumpur, Malaysia
www.christopherleeong.com


Contacts:

Yon See Ting
Partner
D +603 2278 8311
F +603 2278 8322
see.ting.yon@christopherleeong.com

Lee Hock Chye
Managing Partner
D +603 2273 1919
F +603 2273 8310
hock.chye.lee@christopherleeong.com

Fiona Sequerah
Partner
D +603 7958 8310
F +603 7958 8311
fiona.sequerah@christopherleeong.com

Lim Wee Hann
Partner
D +65 62320606
wee.hann.lim@rajahtann.com

Yau Yee Ming
Partner
D +603 2278 8311
F +603 2273 8322
yee.ming.yau@christopherleeong.com

Kuok Yew Chen
Partner
D +603 7958 8310
F +603 7958 8311
yew.chen.kuok@christopherleeong.com

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