SINGAPORE - Singtel and Grab are making a bid for a digital full bank licence together, deepening their venture into the financial sector, the two companies said on Monday (Dec 30).

Ride-hailing firm Grab will hold a 60 per cent stake in the consortium, while the Republic's largest telco will hold the remaining 40 per cent.

A digital full bank licence will allow Grab and Singtel to serve retail customers, including taking deposits. The licence will also enable them to lend money to companies.

Grab and Singtel said in a statement: "The digital bank will aim to cater to the needs of digital-first customers, who have come to expect greater convenience and personalisation, and small and medium-sized enterprises, which cite lack of access to credit as a key pain point."

They added that the consortium will aim to be well-positioned to offer relevant products and services and become a trusted partner for consumers and enterprises.

Both companies already provide e-wallet services. Singtel has Dash while Grab, more popular for its ride-hailing and delivery services, has GrabPay.

Singtel has been working on a regional alliance of e-wallets that will allow users to pay for their purchases overseas with their local e-wallets. Grab has ventured into insurance and lending, according to previous media reports.

The Monetary Authority of Singapore announced in June that it will issue up to five new digital bank licences for both full and wholesale banks to players who may not have an established record in banking. It will stop accepting applications on Tuesday.

Other organisations that have expressed interest in applying for the licence include Standard Chartered Bank, NTUC Enterprise, the V3 Group and Razer.

Singtel and Grab will know if their application has been approved by mid-2020.