Tay & Partners: Licensing of Digital Insurers & Takaful Operators
In late 2020, the Central Bank of Malaysia (“CBM”) had introduced the Licensing Framework for Digital Banks (“Digital Banking Framework”). ‘Digital banking’ is described as a banking business which is carried on wholly or almost wholly through digital or electronic means and extends to cover Islamic digital banking. Following the launch of the Digital Banking Framework, the CBM had received by middle of 2021 a total of 29 different applications. Among the 29 applicants, Sea Group-YTL Berhad, Grab-Singtel, RHB Group-Axiata, Green Packet and iFAST are some of the notable applicants. Notwithstanding the large number of applications, the CBM will only be granting 5 digital banking licenses and the CBM is set to announce very soon in early 2022 the 5 successful applicants. With this, Malaysia will take the place of being the second country after Singapore in ASEAN to issue digital banking licenses.
As we await the announcement of the successful applicants of the digital banking licences, the CBM is now looking to introduce a licensing framework for digital insurers and takaful operators as an extension to the world of digital banking.
