SINGAPORE - The Monetary Authority of Singapore (MAS) on Friday (Dec 4) awarded digital full bank licences to the Grab-Singtel consortium and tech giant Sea, in a first for the city-state and a highly anticipated move that aims to liberalise the financial industry.
Like traditional banks, these players will provide retail customers with services such as opening accounts, deposits as well as issuing debit and credit cards.
However, digital banks will not have a physical presence and all banking services will be done online.
This is different from traditional banks - such as DBS, OCBC and UOB - which offer some banking services via the Internet or mobile apps.
Digital full banks can also serve corporate customers.
Singapore's central bank also issued digital wholesale bank licences to Ant Group as well as a consortium comprising Greenland Financial Holdings, Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management.
These parties can serve corporates and small and medium-sized enterprises.
MAS said in a statement on Friday that the successful applicants must meet all relevant prudential requirements and licensing preconditions before MAS grants them their banking licences
The four new licence holders beat 10 other contenders, such as Razer Youth Bank; and a consortium led by Osim founder Ron Sim's V3 Group and EZ-Link.
They are expected to start business from early 2022.
MAS chief Ravi Menon said the central bank applied a "rigorous, merit-based process to select a strong slate of digital banks".
"We expect them to thrive alongside the incumbent banks and raise the industry's bar in delivering quality financial services, particularly for currently underserved businesses and individuals. They will further strengthen Singapore's financial sector for the digital economy of the future," he said.
Singapore is not alone in its digital banking push.
Hong Kong issued four more virtual bank licences in May last year, bringing the total number of such licences to eight. The winners included Ant SME Services, a unit of Ant Group, and a Xiaomi-AMTD Group venture called Insight Fintech HK.
Countries such as the Philippines, China, Japan and South Korea also have virtual banks.
Twenty-one applications were submitted for digital bank licences in Singapore with MAS saying it could award up to five. Of these, 14 met the eligibility criteria, MAS said in June without releasing the names of the contenders.
The following is a list of applicants, including the new licence holders and contenders which had made their bid public.
Digital full bank licences:
- Tech giant Sea, which owns e-commerce platform Shopee, game developer Garena and digital payments arm SeaMoney
- Grab and Singtel submitted a joint application. Grab will hold a 60 per cent stake with the telco giant holding the remaining 40 per cent in the consortium.
- Razer Youth Bank. Gaming firm Razer's application was through a consortium that includes Sheng Siong Holdings, tech firm LinkSure Global, automotive marketplace Carro, insurer FWD and Insignia Ventures Partners. Razer Fintech owns 60 per cent of the consortium.
- Beyond consortium, led by Osim founder Ron Sim's V3 Group and payments company EZ-Link. It also includes Temasek unit Heliconia, property developer Far East Organization and the Singapore Business Federation.
Digital wholesale bank licences:
- Alibaba-backed Ant Financial
- A consortium comprising Hong Kong financial services group AMTD, peer-to-peer lending platform Funding Societies, Singapore utilities provider SP Group, and Xiaomi Finance
- A consortium led by mainboard-listed wealth management firm iFast Corporation, with two Chinese partners, digital bank operator Yillion Group and fintech company Hande Group
- ByteDance Technology, which owns video-sharing app TikTok
- A consortium comprising Hong Kong-listed supply chain finance company Sheng Ye Capital, financial conglomerate Phillip Capital and artificial intelligence firm Advance.AI. All three members are owned or led by Singaporeans.
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