Bank Negara to issue licensing guidelines for virtual-bank ops soon

Bank Negara Governor Datuk Nor Shamsiah Yunus holds a copy of the Bank Negara Malaysia Annual Report 2018 on March 27, 2019 together with Deputy Governor Shaik Abdul Rasheed Abdul Ghaffour (left)

KUALA LUMPUR: Malaysia is bracing for the arrival of virtual banks, with some industry players expecting up to three licences to be issued by Bank Negara once the regulation for the industry is in place.

In a move that is set to raise the country’s game in financial technology (fintech), Bank Negara governor Datuk Nor Shamsiah Mohd Yunus said the central bank is currently working towards releasing licensing guidelines for virtual-bank operation in Malaysia by the end of 2019.

Speaking to reporters at a briefing in conjunction with the release of Bank Negara 2018 annual report, Nor Shamsiah revealed that the central bank on Wednesday had a briefing with CEOs of various financial institutions pertaining to the establishment of virtual banks – or financial institutions that operate without any physical branch network and offer their services remotely via online banking – in Malaysia.

However, she stressed, discussions with the few parties interested in setting up virtual banks in Malaysia were still in preliminary stage.

“We hope to be able to come up with the licensing requirements for virtual banks by the end of the year,” Nor Shamsiah said.

“We’ve had some discussions with a few banks that have already established virtual banks overseas ... but these are at very preliminary stage,” she added.

It is noted that among local banking groups, CIMB Group Holdings Bhd is the only one that has set up a virtual bank abroad, with the group formally establishing an all-digital bank in the Philippines early this year.