Axiata Group Bhd has announced that it will be making a bid for a digital banking licence in Malaysia. The company, which owns both Celcom and Boost, is currently engaging with up to 11 parties for the effort, including banks and other players operating within the virtual banking sector.
“We have provided our comments, and have been engaging with Bank Negara Malaysia. Hopefully, we can form the partnership that’s needed and make the submission in June,” said the deputy group chief executive of Axiata Group, Datuk Mohd Izzaddin Idris. He further added that the group is likely to establish the virtual bank by the second half of 2021 if all goes well.
Idris also commented that Axiata will select its partner based on what each party can bring to the table, with the company’s own forte being in e-wallet, micro-lending, and algorithmic lending. For instance, it makes a lot of sense to partner with banks even though it is not a requirement to do so, because of their familiarity with industry risks and the compliance framework, said Idris.
Axiata Group owns the Boost e-wallet, which ranks as one of the top three e-wallet service providers in the country with more than 4 million users. Boost is also involved in the government’s ongoing e-Tunai Rakyat initiative.
Axiata Group has also dabbled in shariah-compliant micro lending via its subsidiary, Axiata Digital Capital. As of today, it has provided RM45 million worth of loans, with non-performing loans standing at 1%.
Prior to this, Axiata has expressed an early interest in bidding for one of the five digital banking licences that Bank Negara intends to issue in 2020. The central bank announced this at the end of last year, alongside the issuance of the exposure draft for the digital banking licencing framework.
(Source: The Edge Markets)