Our standard package for clients seeking a banking or digital banking licence in Malaysia. Scope depends on the licence type, target shareholder structure and business model — contact our team for a bespoke quotation.
BNM licenses and regulates several categories of banking institutions, each governed by its own legal framework and prudential requirements.
| Licence type | Governing law | Regulator focus | Typical minimum capital* | |
|---|---|---|---|---|
| Commercial Bank | Commercial Bank | Financial Services Act 2013 (FSA) | Conventional deposit-taking and banking activities | RM 300m foreign banks; generally RM 2bn for others |
| Islamic Bank | Islamic Bank | Islamic Financial Services Act 2013 (IFSA) | Shariah-compliant banking and financing | Generally RM 300m; subject to Islamic banking rules |
| Investment Bank | Investment Bank | Financial Services Act 2013 (FSA) + CMSA 2007 | Investment banking, corporate finance and securities dealing | RM 500m standalone; different rules for banking groups |
| Digital Bank | Digital Bank | FSA or IFSA and BNM's Licensing Framework for Digital Banks | Digitally delivered conventional or Islamic banking services | RM 100m foundational phase; RM 300m thereafter |
Figures show minimum capital funds, not universal paid-up capital. Banks must also meet applicable capital ratios, liquidity standards and other prudential requirements.
Malaysia’s banking sector is regulated under two principal statutes, both administered by Bank Negara Malaysia.
Governs conventional commercial banks, investment banks, insurers and payment systems.
Governs Islamic banks and takaful (Islamic insurance) operators on a Shariah-compliant basis.
BNM launched its digital banking framework in 2020. Five banks were licensed in 2022 and all operated by 2025. The original licensing round is closed.
BNM's digital-bank foundational phase lasts 3–5 years: RM100m minimum capital and RM3bn asset cap, rising to RM300m after the phase.
Thresholds vary by licence type, but BNM applies a consistent set of eligibility criteria across all banking licence categories.
Capital figures must be confirmed against BNM's current published guidelines before filing.
Choose between commercial, Islamic, investment or digital bank based on your business model and target market.
Secure a credible anchor shareholder and align the ownership mix with BNM's foreign equity rules.
Business plan, financial projections, capital adequacy and liquidity documentation.
Governance, risk management and AML/CFT policies and procedures.
Lodge the formal licence application with the full supporting file.
Business model review plus the fit-and-proper assessment of shareholders and management.
Answer BNM's queries and refine the application as required during review.
BNM assesses the application and recommends licensing to the Minister of Finance. If approved, the applicant must meet pre-commencement requirements for capital, governance, technology, controls and reporting before starting banking activities.
Each step's duration depends on applicant readiness and BNM's current review capacity.
| Stage | What happens | Typical duration | |
|---|---|---|---|
| Preliminary Regulatory Assessment | Preliminary Regulatory Assessment | Review of model, eligibility, ownership and licence route | Depends on readiness and regulatory requirements |
| Application Preparation | Application Preparation | Prepare documents, business plan, forecasts and policies | Depends on project complexity |
| Submission to BNM | Submission to BNM | Submit formal application and supporting documents to BNM | Subject to the applicable application process |
| Regulatory Assessment | Regulatory Assessment | BNM reviews owners, finances, governance and compliance | Determined by the regulator |
| Ministerial Decision | Ministerial Decision | Finance Minister decides on licence after BNM review | Subject to completion of the statutory assessment |
| Operational Readiness | Operational Readiness | Meet pre-launch, technology, control and review conditions | Depends on licence type and operational readiness |
| Commencement of Banking Activities | Commencement of Banking Activities | Begin approved banking activities after conditions are met | Subject to approval and commencement requirements |
Timelines are indicative and vary significantly by licence type, applicant readiness and BNM's current review capacity.
Foreign participation in Malaysian banking institutions is subject to the Financial Services Act 2013, the Islamic Financial Services Act 2013 and applicable regulatory approval requirements. The permissible ownership structure depends on the category of banking institution, the nature of the proposed investment and the assessment of the Malaysian authorities.
Foreign equity participation is not subject to a universal ownership limit across all banking licence categories. Malaysia has previously permitted wholly foreign-owned banking institutions under specific licensing arrangements. However, acquisitions of qualifying interests in licensed institutions and changes in corporate control may require prior regulatory approval.
The digital banking licensing exercise completed in April 2022 did not require all successful applicants to be majority-owned by Malaysian shareholders. According to Bank Negara Malaysia, three of the five successful digital banking consortia were majority-owned by Malaysians.
Foreign investors should assess shareholder eligibility, ownership approvals, source-of-funds requirements, corporate governance obligations and any licensing conditions applicable to the proposed banking institution.
A demanding but predictable regulator, and the deepest Islamic finance market in the world.
A mature conventional banking market supervised by a central bank with a long track record of prudential oversight.
The deepest Islamic finance market globally, with a dedicated statutory framework under the IFSA 2013.
A credible base for institutions building a South East Asian banking presence.
BNM has actively opened the sector to digital and Islamic banking entrants through a dedicated licensing framework.
Regulated United Europe combines banking and financial-services licensing expertise with hands-on experience structuring cross-border shareholding and compliance frameworks. Our team works with your business, technology and finance leads to prepare a licence application that meets BNM’s standards from first submission — reducing review cycles and the risk of refusal.
There is no universally prescribed timeframe for obtaining a banking licence in Malaysia. The duration depends on the type of banking institution, the availability of the relevant licensing process, the complexity of the ownership structure, the completeness of the application and the assessment conducted by Bank Negara Malaysia.
Under the Financial Services Act 2013 and Islamic Financial Services Act 2013, the Minister of Finance grants banking licences following BNM’s assessment and recommendation. Additional operational readiness requirements may need to be satisfied before the bank begins providing services.
For the digital banking licences awarded in April 2022, BNM indicated that the operational readiness process following the licensing announcement could take approximately 12–24 months. This was not a statutory processing period for banking licence applications generally.
Foreign ownership is permitted subject to applicable law and regulatory approval. Requirements vary by institution and ownership structure; the 2022 digital banking exercise did not require all successful consortia to be Malaysian-controlled.
Under Malaysia’s digital banking regulatory framework, licensed digital banks must generally maintain minimum capital funds of RM 100 million during the foundational phase and RM 300 million thereafter. The foundational phase lasts between three and five years from the commencement of banking operations, as determined by Bank Negara Malaysia, and is generally subject to an asset threshold of RM 3 billion.
These requirements are reflected in the Financial Services (Minimum Amount of Capital Funds or Surplus of Assets Over Liabilities) (Licensed Person) (Amendment) Order 2024, effective from 2 January 2025.
However, the original digital banking licensing exercise closed on 30 June 2021, and five licences were awarded in April 2022. The existence of this regulatory framework does not mean that new digital banking licence applications are currently being accepted. Any future applications would depend on the availability of an appropriate licensing process.
No — only institutions licensed as Islamic banks under the Islamic Financial Services Act 2013 are required to operate on a fully Shariah-compliant basis, although conventional banks may also offer Islamic banking windows.
Yes — structuring a credible, compliant shareholder base is one of the most important determinants of a successful application, and our team advises on the optimal structure for your specific investor group.
Tell us your licence type, target shareholder structure and business model — we will come back with scope, timeline and a bespoke quotation.
Initial consultation with a licensing specialist.
RUE (Regulated United Europe) customer support team complies with high standards and requirements of clients. Based on feedback from clients worldwide, we continuously improve service quality and response speed to keep support practical and reliable.
Main offices of the international advisory legal company RUE (Regulated United Europe) are located in Estonia (Tallinn), Czech Republic (Prague) and Poland (Warsaw). Contact the most suitable for you branch, so that our company could provide comprehensive individually-tailored to your needs services.
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