MAS announces first licences to operate new Digital Banks in Singapore

The Monetary Authority of Singapore (MAS) announced, on 4 December 2020, the names of the first four successful applicants for licences to operate digital banks in Singapore. MAS said it would award banking licences to up to two Digital Full Banks (DFBs) and up to three Digital Wholesale Bank (DWBs). It received a total of 14 eligible applications.

Announcing the digital bank framework in June 2019, MAS said it would enable non-bank players with strong value propositions and innovative digital business models to offer digital banking services. DFBs will be provide a wide range of financial services and take deposits from retail customers, while DWBs will focus on serving SMEs and other non-retail segments.

Two DFB licences were awarded to an entity wholly-owned by Sea Limited, and a consortium comprising Grab Holding Inc. and Singapore Telecommunications Limited. Two DWB licences were awarded to an entity wholly-owned by Ant Group Co., and to a consortium comprising Greenland Financial Holdings Group Co., Linklogis Hong Kong and Beijing Co-operative Equity Investment Fund Management Co.

MAS said the two selected DFB applicants were clearly stronger than the other eligible DFB applicants. As for the DWBs, the two selected applicants met MAS’ expectations and were assessed to be demonstrably stronger across the criteria, despite the general high quality of the eligible applicants. MAS also took into consideration the applicants’ reviews of the business plans and assumptions underpinning their financial projections arising from the impact of the COVID-19 pandemic.

MAS managing director Ravi Menon 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.”

The successful applicants must meet all relevant prudential requirements and licensing pre-conditions before MAS grants them their respective banking licences. MAS expects the new digital banks to commence operations from early 2022.

These new digital banks are in addition to any subsidiaries that Singapore-incorporated banking groups may already establish under MAS’ existing regulatory framework, including with joint venture partners, to operate new or alternative business models such as a digital-only bank.

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