Deposit cap hinders GXS’ growth, Allo Bank a drag on Bukalapak’s results

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Even if money were to grow on trees, there would still be a limit – there is only so much each branch can handle.

This is why some banks are obligated to have deposit limits, which prevent the accumulation of funds beyond what they can manage and safeguard.

In Singapore, S$50 million (US$37.5 million) is the maximum deposit limit imposed on digital full banks by the country’s banking regulator.

While this measure protects depositors, it also places constraints on the growth of digibanks like GXS, compelling these players to explore alternative strategies to expand their user and revenue base, as my colleague Melissa points out in this week’s Big Story.

The setup is different for banks that operate under a conventional banking license. Take Trust Bank, for instance. Not only is it not subject to the deposit cap, but it also allows withdrawals from ATMs that are owned by shareholder Standard Chartered Bank.

Speaking of digibanks, Bukalapak benefited greatly from the acquisition of Indonesia-based Allo Bank early last year. However, as Allo’s share price slips, so too has the company’s contribution to Bukalapak’s earnings. More on this week’s Hot Take.

— Budi

THE BIG STORY

SG digibank GXS trails Trust in adoption as deposit cap hampers growth

Image credit: Timmy Loen

Trust has close to 60x more monthly active users than GXS, according to industry estimates, even though the two firms launched a day apart.

THE HOT TAKE

Allo Bank’s effect on Bukalapak’s huge losses in Q1

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