The Monetary Authority of Singapore announced today that it has granted digital bank licenses to four applicants, including Jack Ma’s Ant Group and Grab Holdings, the company behind Southeast Asia’s most popular ride-hailing app, Grab.
According to the official announcement, a total of 14 applicants were evaluated on the basis of the value proposition of the business model, management abilities, growth prospects, and potential contributions to the financial system of Singapore.
The latest step is an important development towards liberalization of the financial industry in the city-state. The digital bank license will enable the mentioned companies to provide all banking services online instead of having a physical presence in the region.
The authority noted that all the successful applicants must meet regulatory requirements and conditions before the final issuances of respective banking licenses. The digital banks are expected to start operations in early 2022.
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Commenting on the recent development, Ravi Menon, Managing Director of MAS, said: “MAS 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.”
Additionally, MAS outlined the approval criteria and said that the assessment was done on a holistic basis. The authority divided the licenses into two different categories, Digital Full Bank (DFB), and Digital Wholesale Bank (DWB). MAS selected a consortium comprising Grab Holding Inc. and Singapore Telecommunications Ltd and an entity wholly-owned by Sea Ltd, for DFB license. The authority selected a Greenland Consortium and an entity wholly-owned by Ant Group Co. Ltd for DWB license.
“The assessment was done on a holistic basis, taking into account all relevant considerations for each criterion. MAS took into consideration the eligible applicants’ reviews of the business plans and assumptions underpinning their financial projections arising from the impact of the COVID-19 pandemic,” MAS mentioned in the press release.