ABOUT three dozen firms, including ride-hailer Grab, Standard Chartered and Singapore Telecommunications, are in talks to form consortiums that can meet tough entry norms to bid for Singapore’s digital bank licenses, sources said.

Singapore’s biggest liberalization of its banking sector in two decades seeks to enable online-only banks that can operate at lower costs and therefore offer different services than those of incumbents including DBS Group and OCBC.

But some conditions are stiffer than in other markets such as Hong Kong, including requiring S$1.5 billion (US$1.1 billion) in paid-up capital for retail banks and local control. This is necessitating bidders to team up to combine banking know-how, consumer facing technology expertise and deep pockets.

Many firms are locked in last-minute negotiations to meet the year-end deadline for bidding, said the sources.

“There is a lot of speed dating going on,” said Varun Mittal, who heads the emerging markets fintech business at EY.

Singapore’s central bank will issue up to two retail and three wholesale bank licenses. Retail banks can accept deposits from and offer services to both retail and non-retail customers but must be led by a Singapore-based company. Wholesale banks will mostly serve small and medium enterprises (SMEs).

“Even today, SMEs have great difficulty getting working capital finances because the kinds of credit evaluation and collateral that need to be committed don’t work for them, but for bigger corporations,” said Shailesh Naik, CEO of fintech firm MatchMove, which is exploring joining a consortium.

Grab, Singtel and Standard Chartered confirmed their interest in a license but declined to specify details.

Alibaba Group affiliate Ant Financial and Singapore gaming company Razer are among others considering seeking licenses.

Sources said Chinese insurer Ping An, a consortium including Singapore tycoon Ron Sim’s holding company V3, and others such as insurer Great Eastern are also interested. (SD-Agencies)