Malaysian telecoms firm Axiata Group Bhd (AXIA.KL) and RHB Bank Bhd (RHBC.KL) said on Wednesday they have teamed up to apply for for a digital banking licence, joining what is expected to be a crowded field for a handful of licences on offer.
The central bank has said it will issue five licences for online-only lenders. Applications are due by the end of the month with final decisions expected by the end of 2022.
While RHB, like other traditional banks, offers customers its own online banking services, it said the planned partnership with Axiata’s fintech unit, Boost Holdings Sdn Bhd, would focus on services for underserved retail customers and small and medium-sized businesses.
“It’s about being able to go into a new segment of business but partnering with someone who can shorten the learning curve for us,” RHB Group CEO Khairussaleh Ramli told an online briefing.
If their application is approved, Boost Holdings will own 60% of the digital bank while RHB will hold the rest.
Khairil Abdullah, chief executive of Axiata Digital, said that less than half of Malaysians had access to “meaningful credit”.
“That actually creates a very sizable underserved segment for us to go out and try to capture, and with only up to five licenses going to be issued on the digital bank side, I think there’s enough space for us to play,” he said.
The companies did not immediately respond to requests for comment on Wednesday.
This article was first published on Reuters