Monetary Authority of Singapore updates on digital bank applications assessment

Maria Nikolova

MAS says 14 of the 21 digital bank applications have met the eligibility criteria required for the application to be considered.

The Monetary Authority of Singapore (MAS) today provided an update on the assessment process of applications for digital bank licenses.

MAS said that 14 of the 21 digital bank applications meet the eligibility criteria required for the application to be considered. These eligible applicants, comprising five digital full bank (DFB) applicants and nine digital wholesale bank (DWB) applicants, will progress to the next stage of assessment.

As FinanceFeeds has reported, in January 2020, MAS said that it had received 21 digital bank applications, comprising seven DFB applications and 14 DWB applications. MAS has reviewed all the applications received against the eligibility criteria announced in August 2019.

In the next stage of assessment, MAS will invite the 14 eligible applicants to present their proposals via virtual meetings. Applicants will then be shortlisted based on their (i) value proposition and business model, incorporating the innovative use of technology, (ii) ability to manage a prudent and sustainable digital banking business, as well as (iii) growth prospects and other contributions to Singapore’s financial centre.

In light of the COVID-19 pandemic, which has significantly impacted macroeconomic and business conditions since the applications were received at the end of 2019, MAS has asked all eligible applicants to review the business plans and assumptions underpinning their financial projections, including sources of funding, and provide an independent review of these assumptions. MAS does not expect the request for updated business plans and financial projections to affect the timeline for award of the digital bank licences by the end of this year.

The new digital bank licences, which will be extended to non-bank players, aim to ensure that Singapore’s banking sector continues to be resilient and competitive. Digital full banks will be allowed to take deposits from and provide a wide range of financial services to retail and non-retail customer segments, while digital wholesale banks will be permitted to serve SMEs and other non-retail segments. These new digital banks are in addition to any digital banks that Singapore banking groups may already establish under MAS’ existing regulatory framework.

The application process for digital full bank licences was open to companies headquartered in Singapore and controlled by Singaporeans. Foreign companies are eligible for these full bank licences if they form a joint venture with a Singapore company, and the joint venture meets the headquarter and control requirements. Application for digital wholesale bank licences was open to all companies.

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