Singaporean regulator invites applications for new digital bank licences

The Monetary Authority of Singapore (MAS) announced on Thursday that it will commence accepting applications for new digital bank licences. Interested parties have until December 31, 2019 to submit their applications.

The new digital bank licences, which will be extended to non-bank players, are set 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.

Application for digital full bank licences is 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 is open to all companies.

MAS will issue up to two digital full bank licences and three digital wholesale bank licences.

The regulator expects to announce the successful applicants in mid-2020. Successful applicants will be expected to commence business by mid-2021.

The move underlines the advances of new technologies into banking. Let’s note that Hong Kong commenced the issuance of virtual bank licenses earlier this year. The first three licenses were granted to Livi VB Limited, SC Digital Solutions Limited and ZhongAn Virtual Finance Limited. Later, in May 2019, the Hong Kong Monetary Authority (HKMA) announced it granted virtual banking licences to Ant SME Services (Hong Kong) Limited, Infinium Limited, Insight Fintech HK Limited and Ping An OneConnect Company Limited.