KUALA LUMPUR (Jan 13): The Islamic digital bank consortium led by KAF Investment Bank Bhd (KAF IB) has received approval from Bank Negara Malaysia (BNM) and the Ministry of Finance (MOF) to commence operations, effective from Dec 20, 2024.

The consortium — comprising KAF IB, Carsome, MoneyMatch, Jirnexu and StoreHub — said digital bank KAF Digital Bhd, formally known as KAF Digital Bank, had received the approval following a comprehensive and successful operational readiness review recently validated by the central bank, according to the financial services group in a statement on Monday.

The consortium was one of five successful applicants that BNM announced in April 2022 that had secured digital bank licences approved by the MOF, and one of two applicants to be licensed under the Islamic Financial Services Act 2013.

“KAF Digital Bank will soon move forward into an alpha testing phase with a small select user group prior to progressing into a beta phase with a wider user group,” KAF IB said in the latest statement.

“Upon successful completion of the closed-group testing phases, KAF Digital Bank will be made ready for public sign-ups,” it added.

KAF IB said the digital bank seeks to deliver a robust and resilient banking infrastructure that underpins Malaysians’ trust and expectations.

Together with its consortium partners, it said KAF Digital Bank aims to serve the people while continuously striving to deliver innovative shariah-compliant banking products and services.

KAF Digital Bank and another digital bank under a consortium of Sea Ltd and YTL Power International Bhd’s (KL:YTLPOWR) wholly owned YTL Digital Capital Sdn Bhd are the remaining two of the five digital banking licensees which have yet to launch their platforms.

Grab-led GXBank was launched in November 2023, followed by AEON Bank (M) Bhd’s in May 2024, and Axiata Group Bhd (KL:AXIATA)-RHB Bank Bhd's (KL:RHBBANK) Boost Bank in June the same year.

With the regulatory approval, KAF IB’s digital bank moves closer to its expected launch, while the Sea-YTL Power digital bank is expected to launch this year.