Singapore Telecommunications Ltd (OTC: SGAPY) is teaming up with Singapore-based ridesharing company Grab Holdings Inc to apply for a digital banking license in Singapore, Reuters reported Monday.

What Happened

In a bid to set up a digital bank in Singapore, Grab, and Singtel are forming a consortium, in which the two companies will hold 60% and 40% stake, respectively, said the spokespersons of Grab and Singtel in a joint statement on Monday.

Singtel, the largest telecom operator in Singapore, and Grab, one of Singapore’s acclaimed ridesharing companies have a track record expanding outside their core businesses.

Singtel has been expanding into online gaming and mobile wallets, while Grab offers food delivery and digital payment services via mobile app.

“The natural next step is to build a truly customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent and affordable,” said Reuben Lai, senior managing director at Grab Financial Group.

Why It Matters

The move comes as Singapore’s banking liberalization is moving on to the next stage with online-only banks. The city-state announced in June they would issue a maximum of five licenses to digital banks as part of their liberalization push. This includes up to two full digital bank and three wholesale bank licenses, according to Reuters.

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