Malaysian Telephone Company Axiata Partners With RHB Bank In Digital Banking Licensing Offer
Malaysian telecommunications company Axiata Group Bhd (AXIA.KL) and RHB Bank Bhd (RHBC.KL) have jointly bid on a digital banking license, the two companies said on Wednesday.
Axiata’s e-wallet unit Boost Holdings Sdn Bhd has signed an agreement with RHB to form a consortium to apply for a license under the central bank, the companies said in a joint statement.
The announcement confirms a Reuters report on Monday that the companies were teaming up to apply for a digital banking license.
Boost will own a controlling 60% stake, while RHB will own the rest of the digital bank, subject to approval by Bank Negara Malaysia, they said.
Malaysia’s central bank called for applications for digital banks by the end of the month and said it could issue up to five licenses for online banks only. Bank Negara is expected to finalize its decision towards the end of next year.
Asian regulators are opening up banking services to digital players, encouraged by the boom in mobile connectivity and the prospect of tech companies offering low-cost financial services. The COVID-19 pandemic has increased the need for digital transactions.
The two companies will seek to extend the fintech experience of Boost developed through its digital micro-finance and microinsurance provider Aspirasi, and its electronic wallet.
The companies said the digital banking consortium would spearhead the group-wide partnership, which was formalized through a memorandum of understanding.
“RHB and Axiata strongly believe that digital banking will open up synergistic opportunities for the benefit of underserved retail clients and micro-SMEs that fall outside the normal scope of traditional banks,” they said, referring to small and medium-sized enterprises.
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