Digital bank licence window reopens

Bangladesh Bank has once again invited applications from
interested investors willing to establish a digital bank.
The central bank has, in principle, decided to issue licences for digital banks
against suitable proposals under the Bank Company Act, 1991, according to a
statement.
Applications can be submitted between September 1 and September
30 this year, it added.
The statement said BB now seeks fresh sealed applications from
eligible and qualified sponsors to set up digital banks.
"As a processing fee, each application must be submitted along with a
non-refundable pay order of Tk 5 lakh issued by any scheduled commercial bank
in favour of Bangladesh Bank," as per the circular.
It added that failure to provide all required documents and
information would result in the automatic cancellation of the application.
The central bank said it recognises the changing landscape of
the global financial ecosystem, which is being driven by continuous
technological innovation.
Earlier, BB raised the paid-up capital requirement for digital banks from Tk
125 crore to Tk 300 crore.
The central bank approved the guideline on digital banks in
2023.
According to the guideline, a branchless, end-to-end virtual
banking system will help extend financial services to the last mile of the
country.
Sponsors of the proposed digital banks must provide the minimum
paid-up capital, and the bank must launch an initial public offering (IPO)
within five years from the date of licence issuance by BB. The IPO amount
cannot be less than the sponsors' initial paid-up capital.
Under the guidelines, preliminary approval was granted to Nagad
Digital Bank and Kori Digital Bank.
However, the initiative was suspended following the fall of the
Awami League government in August, 2024.
Aref Hossain Khan, executive director and spokesperson of the
central bank, said that the interim licenses of Nagad Digital Bank and Kori
Digital Bank have not been cancelled.
"We had issued interim licenses to them. The feature of
such a license is that once it is provided, the entities prepare their
platforms and then apply for a full license. After receiving the application,
we conduct an on-site inspection, and if we find them ready, we issue them the
license for commercial launching and operation. But they have not yet sent us
any application requesting a full operational or commercial license," he
said.
"However, if they prepare their platforms now, they will
have to raise their capital to Tk 300 crore instead of previous Tk 125
crore," he added.
















