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Regulatory Framework for Digital Banks [UPDATE]

Ref No : 03/20/02 03 Mar 2020 Embargo : For immediate release    

UPDATE: In light of the disruptions caused by COVID-19 outbreak, Bank Negara Malaysia wishes to inform that the consultation period for the Exposure Draft has been extended until 30 June 2020.

Bank Negara Malaysia has today issued an updated Exposure Draft on the Licensing Framework for Digital Banks that incorporates the proposed simplified regulatory framework for digital banks applicable during the foundational phase. The simplifications aim to reduce regulatory burden for new entrants that have strong value propositions for the development of the Malaysian economy, whilst safeguarding the integrity and stability of the financial system.

Key features of the simplified regulatory framework include:

  1. Capital adequacy requirement: The risk categories to calculate the credit and market risk components for risk-weighted assets under Basel II capital framework have been rationalised into simpler categories; and
  2. Liquidity requirement: 25% of the digital bank's on-balance sheet liabilities must be held in high quality liquid assets. 

Digital banks will be required to comply with all equivalent regulatory requirements applicable to incumbent banks after the foundational phase.

Bank Negara Malaysia is extending the consultation period for the Exposure Draft until 30 April 2020. All feedback on the Exposure Draft should be submitted to the Bank by 30 April 2020 to the email or address below (electronic submission is encouraged). Applications for new licence(s) will be open upon issuance of the Policy Document.

Exposure Draft on Licensing Framework for Digital Banks


Submission of feedback:


Jabatan Pembangunan dan Inovasi Kewangan
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur

Bank Negara Malaysia
03 Mar 2020

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