Digital Banks commence operations in Malaysia

Three of the five successful applicants that were granted digital banking licences by Bank Negara Malaysia (“BNM”) have announced commencement of operations.
The first to announce its operational readiness in September 2023 was GX Bank Berhad, a subsidiary of GXS Bank Pte Ltd (a joint-venture between Grab Holdings Limited and Singapore Telecommunications Ltd), and whose other shareholders include a consortium of Malaysian investors, including the Kuok Group.1
This was followed by announcements on 8 January 2024 by Boost Bank Berhad (formerly called Boost Berhad), a 60:40 joint venture between Axiata Group Berhad’s indirect subsidiary, Boost Holdings Sdn Bhd, and RHB Bank Berhad, of their receipt of approval from BNM to commence operations from 15 January 2024 and by AEON Bank (M) Berhad (formerly called ACS Digital Berhad), of its receipt of BNM’s validation of its operational readiness.2 AEON Bank (M) Berhad, whose shareholders comprise AEON Financial Service Co. Ltd, AEON Credit Service (M) Berhad and MoneyLion Inc., will be the first licensed Islamic digital bank to commence operations in Malaysia.
As it may be recalled, BNM had announced on 22 April 2022 that the Minister of Finance had approved the issuance of digital banking licences to five applicants, three of which are as mentioned above. The remaining two successful applicants are a consortium led by Sea Limited and YTL Digital Capital Sdn Bhd (for conventional digital banking licence), and a consortium led by KAF Investment Bank Berhad (for Islamic digital banking licence). In announcing the award of the digital banking licence, BNM indicated that it would take between 12 to 24 months for the licensees to validate their operational readiness. With the 24-months deadline looming, announcements are likely to be forthcoming from these two successful applicants as to their operational readiness.
Some of our previous articles on digital banking in Malaysia can be accessed here, here and here.
Alert by Lee Ai Hsian (Partner) of the Fintech Practice and the Banking and Finance Practice of Skrine.

1 GXBank receives approval from Bank Negara to commence operations; The Star Online; 5 September 2023.
2 Announcements to Bursa Malaysia on 8 January 2024 by Axiata Group Berhad and AEON Credit Service (M) Berhad.

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact