Singapore to issue up to 5 digital bank licenses to non-bank players

The Monetary Authority of Singapore (MAS) has announced that it will issue up to five new digital bank licenses, which will be extended to non-bank players, to strengthen the country’s banking system in the digital economy.

MAS headquarters in central Singapore / Photo credit: Tech in Asia

The move comes in addition to any digital bank subsidiaries Singapore banking groups may establish under a policy statement it issued in 2000, the authority said.

The five new licenses will include up to two digital full bank licenses and three digital wholesale bank licenses. The former will allow licensees to provide a range of financial services and take deposits from retail customers, while the latter would allow licensees to serve small and medium-sized enterprises, as well as other non-retail segments.

Companies headquartered in Singapore and controlled by Singaporeans may apply for digital full bank licenses. Foreign companies, on the other hand, will be eligible for the licenses if they form a joint venture with a Singapore-based company, and if the joint venture meets the headquarter and control requirements.

Applications for digital wholesale bank licenses are open to all companies.

MAS looks to invite applications in August and will provide more information, including admission criteria, around that time.

The decision may open opportunities for players like ride-hailing unicorn Grab, which is reportedly looking to apply for a digital bank license as it explores opportunities in Singapore’s banking sector.