A total of 12 entities have submitted applications to Bangladesh Bank (BB) for licenses to establish Digital Banks.
These institutions aim to offer banking services entirely through internet- and app-based platforms, relying solely on mobile phones and digital devices for a cashless operation.
The central bank began accepting applications for Digital Bank licenses on September 1. Although the initial deadline was September 30, it was extended to November 2, which served as the final day for submission.
The 12 institutions that have applied to set up Digital Banks are:
1. British Bangla Digital Bank PLC
2. Digital Banking of Bhutan-DK
3. Amar Digital Bank-22 MFI
4. 36 Digital Bank PLC
5. Boost-Robi
6. Amar Bank (Proposed)
7. App Bank-Farmers
8. Nova Digital Bank-Banglalink & Square
9. Moitri Digital Bank PLC
10. Upokari Digital Bank
11. Munafa Islami Digital Bank-Akij
12. bKash Digital Bank
Bangladesh Bank issued the Digital Bank Policy on June 14, 2023. Key requirements and characteristics include:
Capital Requirement: A minimum paid-up capital of Tk300 crore is required to establish a digital bank.
Branchless Operation: Digital banks must operate without any physical branches, sub-branches, ATMs, CDMs, or CRMs. They will not provide any Over-The-Counter (OTC) services.
Service Delivery: All services must be app-based and delivered through digital devices, offering 24/7 service.
Products: They may issue virtual cards, QR codes, and other technology-based products but cannot issue plastic cards for transactions. Customers can, however, use the ATM and agent services of other conventional banks.
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Lending Restrictions: Digital banks are prohibited from opening Letters of Credit (LCs) and cannot provide loans to large or medium industries. They are only permitted to offer small loans.
IPO Mandate: Every digital bank must launch an Initial Public Offering (IPO) within five years of receiving the Bangladesh Bank’s approval. The IPO amount must be at least equal to the initial investment made by the promoters.
Digital banking is a broad segment of online banking that provides comprehensive banking services primarily via the internet and digital channels.