Two full-bank and two wholesale-bank licensees must hold combined paid-up capital of at least SGD 3.2 billion, far surpassing the SGD 1 billion threshold.

The Monetary Authority of Singapore’s 2020 digital bank framework imposed phased capital requirements that, once fully met, require the four successful licensees to hold over SGD 3 billion in minimum paid-up capital alone. This aggregate figure—SGD 3.2 billion—stems from regulatory mandates for two digital full banks (DFBs) and two digital wholesale banks (DWBs) announced on 4 December 2020, and far exceeds the SGD 1 billion often cited in market commentary as the total committed deployment.

MAS Digital Bank Framework: Two License Tiers

In June 2019, the Monetary Authority of Singapore (MAS) announced a digital bank framework designed to allow non-bank players to apply for digital banking licenses, breaking a two-decade status quo in the city-state’s banking sector. The framework established two distinct license categories with diverging capital requirements and operational restrictions.

Digital full banks (DFBs) are authorized to take retail deposits and serve the broader consumer market. Under the MAS framework, a DFB must begin operations as a restricted entity with a minimum paid-up capital of SGD 15 million. During this restricted phase, the bank faces deposit caps: an aggregate deposit cap of SGD 50 million and an individual depositor cap of SGD 75,000. Once the DFB meets all MAS criteria for graduation—including assessments of business performance, loan quality, risk management, and compliance track record—the deposit restrictions are lifted, and the minimum paid-up capital requirement increases to SGD 1.5 billion.

Digital wholesale banks (DWBs) are licensed to serve small and medium enterprises (SMEs) and corporate clients. DWBs face a simpler capital regime: a minimum paid-up capital of SGD 100 million from commencement, with no phase-in process. They are not subject to the deposit caps that apply to retail-focused DFBs, though their deposit-taking is limited to fixed deposits of at least SGD 250,000 from individuals and business deposit accounts from SMEs and corporates.

Successful Applicants and Their License Types

On 4 December 2020, MAS announced the four successful applicants for digital bank licenses. The two DFB licensees—required to be Singaporean-controlled and headquartered in Singapore—were:

• Grab/Singtel consortium (digital full bank)
• V3 Group/EZ-Link consortium (digital full bank)

The two DWB licensees, which can be foreign-controlled without the same ownership restrictions, were:

• Sea Limited (digital wholesale bank)
• Ant Group (digital wholesale bank)

MAS applied what it described as a “rigorous, merit-based process” to select these applicants. All eligible applicants were required to submit business plans and financial projections, and in June 2020—after the COVID-19 pandemic had significantly altered macroeconomic conditions—MAS asked applicants to review their business plans and assumptions, including sources of funding, with an independent review of those assumptions.

Combined Capital Commitment Exceeds SGD 1 Billion

The aggregate minimum paid-up capital requirement across all four licensees is straightforward to calculate:

• Two DFBs × SGD 1.5 billion each = SGD 3.0 billion
• Two DWBs × SGD 100 million each = SGD 200 million
• Total: SGD 3.2 billion

This total is more than triple the SGD 1 billion figure commonly referenced in market reports as the combined capital and operational expenditure commitment during the initial five-year deployment phase. It is important to note that the SGD 3.2 billion represents minimum paid-up capital requirements only, and does not include additional operational expenditure for technology infrastructure, compliance systems, staffing, and customer acquisition—which industry estimates suggest likely adds hundreds of millions of dollars over the same period, though precise public figures are not available.

Minimum paid-up capital (SGD billion) (SGD billion)Source: Orionmano Industries

Phased Deployment and Graduation Milestones

The capital deployment for DFB licensees follows a phased schedule tied to regulatory milestones. A restricted DFB begins with the SGD 15 million minimum and can only collect up to SGD 50 million in aggregate deposits, with each individual customer capped at SGD 75,000. The graduation to full functionality—which lifts all deposit caps and triggers the SGD 1.5 billion capital requirement—is not governed by a fixed timeline. MAS does not prescribe a specific period for graduation but requires the DFB to present “a viable plan to meet the requirements.” In assessing readiness, MAS considers factors including the bank’s business and financial performance, quality of loans, risk management systems, and compliance track record.

For DWBs, there is no phase-in. Sea Limited and Ant Group were required to meet the SGD 100 million minimum paid-up capital from the commencement of their operations.

The five-year deployment phase commonly referenced in industry commentary aligns with typical business plan horizons for digital banks to achieve scale and meet the graduation criteria set by MAS. As these entities ramp up operations and approach full graduation—likely within the first half of this decade—their actual deployed capital, including operational expenditure, is expected to far exceed the regulatory minimums. This reinforces the scale of financial commitment required to compete in Singapore’s banking sector, where even established incumbents face substantial regulatory capital charges—MAS imposed an additional SGD 930 million in regulatory capital on DBS in February 2022 following a November 2021 digital outage, applying a 1.5-times multiplier to the bank’s operational risk-weighted assets.