Fifty-two companies have submitted applications to the Bangladesh Bank for licences to establish digital banking operations.
Mezbaul Haque, executive director and spokesperson of the Bangladesh Bank, confirmed this development to The Business Post on Sunday.
The pool of applicants includes both domestic and foreign companies encompassing a diverse range of sectors, such as commercial banks, mobile financial services (MFS) providers, ride-sharing and food delivery services, IT service providers, and pharmaceutical companies. While some companies have applied individually, others have formed joint applications.
Mezbaul said, "Fifty-two companies have applied for digital banking licenses. Approximately 15 of them are banks, while the remaining applicants consist of mobile financing services, IT companies, and foreign entities. We will now proceed with the verification of all applications."
The Bangladesh Bank is set to approve digital banking licences in its upcoming board meeting, granting permission to companies deemed capable of effectively operating in the digital banking sphere.
The deadline for filing the applications ended on August 17.
The central bank invited applications for the digital bank from entrepreneurs from June 21 this year.
As per the Bangladesh Bank rule, investors willing to set up a digital bank will have to have a minimum paid-up capital of Tk 125 crore and the capital will have to come from the sponsors.
A reliable source from the Bangladesh Bank informed The Business Post that, out of the 52 applicants, not all will be granted permission to engage in digital banking.
Instead, the central bank will carefully assess the capabilities of each applicant and maintain a balanced approach in the market. Preference will be given to companies that present compelling proposals, robust IT strategies, and effective operational mechanisms.
Economist Zahid Hussain sharing his perspective with The Business Post, said, "Numerous companies are expressing interest in establishing digital banking. However, clarity is lacking in terms of the potential services and benefits that digital banking can offer. It remains uncertain whether this endeavour will ultimately be successful."
He further emphasised, "Within the current banking framework, online services are already available. The Bangladesh Bank should elucidate how digital banking will provide added value."
A digital bank, often referred to as a Neobank or virtual bank, delivers its full range of services through online platforms, eliminating the need for traditional paperwork like checks, pay-in slips, and demand drafts.
Such banks function akin to conventional scheduled commercial banks, offering services such as loans and deposits.
Digital banks operate exclusively online, devoid of physical branches, sub-branches, or ATM kiosks. All transactions are conducted through mobile and digital devices, with no provision for in-person transactions.
The Bangladesh Bank officially endorsed the Digital Bank guideline on June 14.