SINGAPORE – Singapore’s new digital banks backed by Grab Holdings and Sea are asking the country’s central bank to lift a cap on deposits that they see as hamstringing their growth.
While the deposit cap during the lenders’ first two years of operation is meant to safeguard consumers’ interests, the new entrants see the restriction – which has meant applications for their savings accounts are by invitation only – as curbing their lending ability. Time is also ticking for these digibanks owned by non-financial firms to boost scale, given that they had to show a path towards profitability within five years during their application process.
A spokesman for Grab’s GXS Bank said the firm neared the regulatory cap “within months” of launching its savings account, and the wait list to open such an account “continues to grow organically every day”. Grab’s digital bank, which is also backed by Singtel, was set up just under a year ago. The firm states on its website that each invited depositor can put in up to $5,000 in a savings account and is working on raising the limit as soon as possible.
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