iFAST-led consortium applies for Malaysia digital bank license

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A consortium led by iFAST has submitted an application for a digital bank license to Bank Negara Malaysia (BNM), the Singapore-listed wealth management platform said in a filing to SGX Wednesday.

If the application is successful, iFAST will hold 40 percent of the digital bank, and the beneficial equity ownership of the consortium will be around 57 percent Malaysian, the statement said.

The Malaysian consortium partners are Koperasi Angkatan Tentera Malaysia, which is one of the country’s largest credit co-operatives, THZ Alliance, which is a private investment holding company, and Lee Thaim Wah, who founded homegrown grocery chain 99 Speed Mart, iFAST said.

“The vast experience and market reach of these consortium partners will enable iFAST Bank to better address the needs of the underserved market, thereby improving financial inclusion and growth in Malaysia,” iFAST said.

In addition, the consortium includes Yillion Fintech, which provides digital-banking technology for China-based digital bank Yillion Bank, iFAST said.

Lim Chung Chun, chairman and CEO of iFAST, said the iFAST Bank could offer “positive change” for Malaysia’s Bottom 40 percent (B40) population, who represent unserved and underserved market segments.

“We think that the B40 segment has clearly been unserved and left behind even as Malaysia progresses. With the synergistic capabilities within our consortium, the solutions offered for the B40 are ones that will provide immediate benefits and results – such as free life insurance, interest-free loans for daily necessities, and micro investments and insurance,” Lim said in the statement. “iFAST Bank will serve the B40 segment and be profitable while doing so.”

BNM has said it could issue up to five digital bank licenses by the first quarter of 2022, with the license carrying the ability to serve both retail and corporate customers.

An iFAST-led consortium had been among the contenders for a digital bank license in Singapore, but was not chosen when the winners were announced in late 2020. It had also unsuccessfully applied for a virtual banking license in Hong Kong.