Digital Bank Capital Doubled: Bangladesh Bank Reopens Applications

Bangladesh Bank has announced that after more than two years, it is reopening the application process for establishing digital banks—this time with the minimum paid-up capital requirement more than doubled to Tk 300 crore. Applications will be accepted from September 1 to September 30.

The announcement was made on the central bank’s official Facebook page on Monday evening, October 25.

According to sources, those who had previously applied will have to reapply. A non-refundable fee of Tk 500,000 must be submitted with the application. Incomplete applications without the required documents will be rejected. Entities that had received temporary approval but failed to commence operations will also need to submit fresh applications for a commercial license. Other than the increased capital requirement, applications must comply with the earlier policy framework for digital banks.

Licenses for digital banks will be issued under the Bank Companies Act of 1991, while payment services will operate under the Bangladesh Payment and Settlement Systems Regulations of 2014.

As per Bangladesh Bank’s policy, digital banks must maintain a head office but will not operate their own branches, sub-branches, ATMs, CDMs, or CRMs. All services must be app-based. Customers may, however, use ATMs, agents, and other facilities of existing banks. Digital banks will not be allowed to open letters of credit (LCs), nor will they be able to extend loans to large or medium industries. They will only be permitted to provide small loans.

Within five years of receiving approval, each digital bank will be required to launch an Initial Public Offering (IPO). The IPO amount must at least equal the entrepreneurs’ initial investment.