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Companies form alliances for Singapore’s digital bank licences

standard charteredGrabRide-hailing app Grab, Standard Chartered and Singapore Telecommunications are amongst the three dozen firms who are in the midst of discussions to form consortiums to bid for Singapore’s digital bank licences, news agency Reuters reported citing sources. Alibaba Group affiliate Ant Financial and Singapore gaming company Razer are among others who are considering seeking the licences.

Some of the conditions required for obtaining the licence, for instance having $1.1 billion in paid-up capital for retail banks and local control, are rigid as compared to markets such as Hong Kong. This has raised the need for companies to group and team up by combining their banking know-how, consumer-facing technology expertise and deep pockets, the report added.

Singapore aims to empower the banking sector, other than just those of incumbents like DBS Group and OCBC, to facilitate low-cost operations in online-only banks. Sources informed Reuters that Chinese insurer Ping An, a consortium including Singapore tycoon Ron Sim’s holding company V3, and others such as insurer Great Eastern are interested too.

The financial regulator of the island-nation has been working towards boosting the FinTech space in the nation. In June, the Monetary Authority of Singapore (MAS) had invited applications for the issuance of two digital full bank licences and three digital wholesale bank licences to encourage service for underserved sections of the market. Digital full banks will be allowed to take deposits from and provide a wide range of financial services to retail and non-retail customer segments, while digital wholesale banks will be permitted to serve small and medium-sized enterprises (SMEs) and other non-retail segments.

Applicants have until December 31, 2019, to submit their entries for the licence, MAS had said in a notice on its website. MAS expects to announce the results by mid-2020 and the successful applicants will be expected to commence business by mid-2021.

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