Malaysian teleco Axiata Group Bhd and RHB Banking Group announced on Wednesday that they have formed a consortium to apply for a digital banking licence in the country.
Boost Holdings, Axiata’s subsidiary that operates an e-wallet, will own 60%, while RHB, the country’s fourth-largest banking group, will own the rest of the digital bank, subject to approval from the central bank, the companies said.
Axiata and RHB said they have formalised a memorandum of understanding (MoU) to expand and deepen their collaborations.
Malaysia’s central bank, Bank Negara, has invited applications for digital bank licences by June 30 and said it may issue up to five permits by the end of the year.
Across Asia, regulators are opening up banking for digital players. In December last year, the Monetary Authority of Singapore (MAS) announced four successful digital bank applicants. The winners included a Grab-Singtel consortium and Sea Ltd.
“Through innovative, efficient and secure banking services, we are confident our strategic collaboration will meet the fast-evolving demands of retail customers and micro-SMEs overlooked by traditional institutions,” said Axiata’s president and group CEO Izzaddin Idris.
RHB and Axiata are also exploring more opportunities to enhance their joint customer ecosystems. One potential initiative involves providing combined solutions to SMEs, the companies said.
Axiata currently serves more than 250,000 merchants and micro-businesses through its Boost e-Wallet and Aspirasi microfinancing businesses, whereas RHB offers more than 200,000 of its SMEs access to a connected ecosystem of SME banking and business solutions.
Celcom Axiata Bhd, a subsidiary of Axiata, has signed up as a major commercial partner on joint Go-To-Market activities with the digital bank on products and services which will benefit the customers of both parties. Other commercial partners are being finalised and will be announced in due course.