A total of 12 companies, both local and international, have submitted applications to Bangladesh Bank for the establishment of digital banks. Upon approval, these institutions will provide cashless banking services through the internet, mobile apps, and other digital platforms.
Arif Hossain Khan, spokesperson and executive director of Bangladesh Bank, confirmed the development on Monday, 3rd November. He stated that the following companies have applied for digital banking licences: British Bangla Digital Bank PLC, Digital Banking of Bhutan-DK, Amar Digital Bank-22 MFI, 36 Digital Bank PLC, Boost-Robi, Amar Bank (proposed), App Bank-Farmers, Nova Digital Bank-Banglalink and Square, Maitree Digital Bank PLC, Upokari Digital Bank, Munafa Islami Digital Bank-Akij, and Bikash Digital Bank.
Earlier, Bangladesh Bank began accepting applications for digital banking licences on 1st September, with the original deadline set for 30th September. This deadline was later extended to 2nd November.
What is a Digital Bank?
A digital bank is an internet and app-based banking service, meaning customers will need to access it through digital devices. No physical branches or over-the-counter services will be available for these banks.
On 14th June 2023, Bangladesh Bank introduced regulations for digital banks. According to these guidelines, a digital bank must have a minimum paid-up capital of BDT 300 crore. The bank will operate only from its head office and will not have any physical branches or offices to provide services. Essentially, it will not offer over-the-counter (OTC) services, kiosks, or any physical infrastructure such as ATMs or CDMs. All services will be accessed through apps, mobile phones, or other digital tools.
Customers of digital banks will be able to access services 24/7. The bank will also have the option to offer virtual cards, QR codes, and other modern technology-based products to enhance the convenience of transactions. However, transactions via plastic cards will not be allowed.
While customers can use ATMs, agents, and other services from different banks, these digital banks will not be allowed to offer loans to large and medium-sized industries or open letters of credit (LCs). They will only be permitted to provide small loans.