Digital bank startups backed by Grab Holdings Ltd. and Sea Ltd. have started accepting larger deposits in Singapore, suggesting the city-state’s regulator has raised limits previously imposed on their fintech firms.
(Bloomberg) — Digital bank startups backed by Grab Holdings Ltd. and Sea Ltd. have started accepting larger deposits in Singapore, suggesting the city-state’s regulator has raised limits previously imposed on their fintech firms.
GXS Bank, the digibank joint venture of Grab and Singapore Telecommunications Ltd., said Wednesday that customers can now each deposit up to S$75,000 ($57,000) into a savings account. The limit previously was S$5,000. Sea’s MariBank, the only other holder of a digital full bank license in Singapore, also raised its maximum for individuals to the same level effective from July 20, according to a statement sent to Bloomberg News.
The changes signal that the Monetary Authority of Singapore has raised the deposit cap of S$50 million placed on the digital banks. That would be a boon for their push to compete with traditional lenders in the wealthy city-state.
Digital banks backed by the country’s two biggest tech firms have been pushing the central bank to lift restrictions that they see as curbing their lending ability. The tech companies are expanding to financial services to fuel growth beyond businesses such as online retailing and ride-hailing.
Read more: Grab, Sea Push Singapore to Lift Digital Banks’ Deposit Cap
Under MAS rules, a digital bank starts operations as a restricted one before becoming a so-called full functioning lender. Its deposit cap will progressively increase until there are eventually no limitations. The deposit caps are meant to safeguard consumers’ interests, and there is no fixed time period for the restrictions to remain in place.
The MAS doesn’t comment on its supervisory dealings with specific firms, a spokesperson for the regulator said in an emailed response to Bloomberg News. The easing of the restrictions will depend on the bank’s ability to meet its license application commitments and the MAS’s supervisory expectations, the spokesperson said.
Read more: Cap Lift May Let Grab, Sea Digibanks Catch Up to Trust: React
An easing of the deposit cap could help the digibanks to boost scale and approach break-even. As they applied for their licenses, they had to show a path toward profitability within five years.
Another upstart digibank, Trust Bank, which doesn’t have deposit limits because it is backed by traditional lender Standard Chartered Plc, has raked in more than S$1 billion of deposits.
Grab’s digital bank was set up just under a year ago and had accepted savings account customers on an invitation-only basis. It is now removing that condition, accepting “all eligible individuals” as customers, it said in a statement.
Sea’s MariBank started deposit-taking with its employees last year and has since expanded to lending to businesses. While its offerings were previously on an invite-only basis for users of Sea’s Shopee marketplace app, MariBank said they will in the coming weeks be open to individuals and businesses from “the Sea ecosystem and beyond,” according to the statement.
–With assistance from Chanyaporn Chanjaroen.
(Adds comment from regulator in fifth paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.