State has applied for digital banking licence

KUCHING: Sarawak has applied for a digital banking licence and is awaiting approval from the Ministry of Finance (MOF) and Bank Negara Malaysia (BNM), revealed Chief Minister Datuk Patinggi Abang Johari Tun Openg.

Pointing out that the move was in tandem with the state digital economy initiative, he added, “This is looking at the fact that in future, business transactions will be done digitally. This is also because Kuala Lumpur and Singapore are regional financial centres,” he said.

Abang Johari added that in order to achieve the digital banking concept, the state, through Sarawak Multimedia Authority (SMA) and with the assistance from Malaysian Communications and Multimedia Commission (MCMC), was upgrading digital infrastructures by building more telecommunication towers.

“In five to ten years’ time, our basic infrastructure will be there and the business community can take advantage of this infrastructure by using the concept of digital banking.

“Therefore, it is hoped that by 2022 or 2033, digital banking will be here and this must go hand in hand with the 4G and 5G networks,” he said during the Chief Minister’s Webinar entitled ‘Sarawak 2021 Budget: Towards A High-Income Society In 2030’ hosted by the Sarawak Business Federation.

Sarawakians, especially the business community, would benefit from digital banking, said Abang Johari. 

He said soon, more traditional banks would adopt digital banking and that was the reason why Bank Negara Malaysia was looking into the possibility of issuing digital bank licences.

“I am a firm believer in digital transformation. If you study the banking industry now, many of our banks still have retail branches. The time will come when the banks will have fewer branches,” he said.

Abang Johari said other countries such as Singapore had already adopted the new banking system.

“In Sarawak, we have introduced our mobile payment, SarawakPay, which is similar to digital banking,” he said.

Replying to a question by Sarawak Business Federation’s deputy president Datuk Philip Ting on the state government’s plan to set up the Sovereign Wealth Fund, the chief minister said a thorough study must be done before its establishment.

He said experts would be engaged to study the best model to manage the fund.  

Abang Johari said the state was studying how Norway managed its sovereign fund because its economic model was based on the revenue from its resources, just like Sarawak.

“Only with extra revenue can we set up this sovereign fund plus there must be surplus revenue.

“For this, the state needs a stable government as well. There must be leaders who are visionaries — who can see what is good for the future and that is important for Sarawak,” said Abang Johari.