1. Home
  2. Insights
  3. Alerts
  4. March 2020

BNM issues updated Exposure Draft of Licensing Framework for Digital Banks

03 March 2020

Bank Negara Malaysia (‘BNM’) issued an updated Exposure Draft of the Licensing Framework for Digital Banks (‘Updated Draft Framework Document’) earlier today.
 
The Updated Draft Framework Document supersedes the Exposure Draft of the Licensing Framework for Digital Banks issued by BNM on 27 December 2019 (‘Original Draft Framework Document’).
 
The issuance of the Updated Draft Framework Document was envisaged in the Original Draft Framework Document as BNM had indicated in the latter that further details of the simplified regulatory requirements applicable to a digital bank during the foundational phase would be published during the consultation period (see footnote 1 of the Original Draft Framework Document).
 
The main differences between the Updated Draft Framework Document and the Original Draft Framework Document are as follows –
 
  1. Eight documents have been added to the list of documents the that should be read together with the Updated Draft Framework Document (see paragraphs (e) to (l) of paragraph 6.1 of the Updated Draft Framework Document).
  1. The elements comprised in the simplified regulatory framework applicable during the foundational phase of a digital bank’s operations have been expanded and clarified (see paragraph 14.1 and appendices 1 and 2 of the Updated Draft Framework Document).
  1. Additional requirements have been included in paragraphs 14.3, 14.4 and 14.6 of the Updated Draft Framework Document, i.e. the requirement to obtain BNM’s approval before a digital bank adopts the full regulatory framework applicable to a licensed bank or a licensed Islamic bank during the foundational phase, and the right of BNM to impose additional requirements on a digital bank having regard to the specific risk profile or business model of a digital bank.
For a summary of the other regulatory requirements for digital banks please click here.
 
The consultation period for the Updated Draft Framework Document has been extended to 30 April 2020.
 

  • Proud to be a member of
  • connect with us
  •  
  •