In just four days after opening the application portal, Bangladesh Bank (BB) received a high response from entrepreneurs seeking digital bank licences.
The central bank on June 21 invited applications for establishing digital banks and set the deadline for applications on August 1.
During this short period, entrepreneurs applied for licences for four proposed digital banks – Padma Digital Bank Plc, Nirapod Digital Bank Plc, bKash Digital Bank Plc, and Kazi Digital Bank Plc.
A senior BB official said that the entrepreneurs of the Padma Bank have applied for the proposed Padma Digital Bank Plc, and bKash entrepreneurs have applied for the bKash Digital Bank Plc.
The identities of the entrepreneurs behind Nirapod Digital Bank Plc and Kazi Digital Bank Plc are yet to be known.
The official stated that they are receiving a tremendous response from the entrepreneurs.
After August 1, BB will review the applications and related documents to issue a no-objection certificate for the proposed digital banks, the official said.
The entrepreneurs of bKash, one of the country’s leading mobile financial service (MFS) providers, are eager to establish the digital bank but the company’s officials claimed that the project is currently still “in its early stages.”
Nagad, another rapidly growing MFS provider, also expressed its interest in launching a digital bank. Tanvir A Mishuk, the founder and managing director of Nagad, earlier said that the company is already well-equipped with the necessary products and services to establish a digital bank.
He then claimed that if Nagad receives a digital bank licence, it will commence operations and provide services to the public immediately.
The entrepreneurs of the company, however, are yet to apply for the digital bank licence.
In the notice inviting entrepreneurs to apply for a digital bank licence, BB had specified a non-refundable application processing fee of Tk 5 lakh through the web portal.
The guidelines for issuing digital bank licences were approved by the BB board of directors on June 14, under the Bank Companies Act of 1994, to promote financial inclusion.
The minimum capital requirement for a digital bank has been set at Tk 125 crore, compared to Tk 500 crore for conventional banks. Each sponsor of a digital bank is required to hold at least Tk 50 lakh in shares.
The guidelines also state that the sponsors' contributions to the share capital must come from their declared net worth to the tax authorities, and not from borrowed funds or other sources.
While the move has been welcomed by industry insiders, particularly those in the information technology sector, concerns have been raised about whether the country's IT infrastructure is strong enough to support the digital banks.
