Bangladesh Bank gives initial approval to five digital banks

Bangladesh Bank has given initial approval to five digital banks, paving the way for the issuance of Letters of Intent (LoIs) to the selected applicants.

The decision was taken at a meeting of the Bangladesh Bank board on Thursday, a central bank spokesperson confirmed to the media.

The five proposed digital banks are bKash Digital Bank, Boost-Robi, Digital Banking of Bhutan-DK, Kori Digital Bank and Nova Digital Bank.

The initiatives are backed by major companies and business groups, including bKash, Robi, Bhutan’s DK Bank and the Banglalink-Square partnership.

The latest approvals were selected from 12 applicants that submitted proposals in the second round of applications for digital bank licences. The applicants included mobile financial service providers, telecom operators, business groups, microfinance institutions and entities with foreign partnerships.

However, an LoI does not constitute a final banking licence. The selected applicants will have to meet Bangladesh Bank’s regulatory and operational requirements before receiving approval to launch commercial banking operations.

Under the digital banking framework, the banks will operate without conventional branches, with customers accessing services mainly through mobile applications and other digital platforms. They may offer services including deposits, payments, virtual cards and small loans.

Bangladesh Bank has set the minimum paid-up capital for a digital bank at 300 crore taka, up from the previous requirement of 125 crore taka.

The central bank introduced the digital banking framework in 2023 to expand access to formal financial services, particularly for underserved customers and small businesses. The initiative also aims to promote technology-based banking and reduce reliance on cash.