Dozen Digital Banks Dream Big in Bangladesh

Twelve institutions have submitted applications to establish digital banks in Bangladesh, aiming to offer cashless, app-based financial services accessible entirely through smartphones and other digital devices.

According to Bangladesh Bank sources on Monday, November 3, the central bank began accepting applications for digital banking licenses on September 1. The initial deadline of September 30 was later extended to November 2, making Sunday the final day for submissions.

As per the latest information from Bangladesh Bank, the 12 applicants include: 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 & Square, Maitree Digital Bank PLC, Upokari Digital Bank, Munafa Islami Digital Bank-Akij, and bKash Digital Bank.

On June 14, 2023, Bangladesh Bank issued the Guidelines for Establishment and Operation of Digital Banks. Under these rules, each digital bank must maintain a minimum paid-up capital of BDT 300 crore. The institutions will operate their payment services in compliance with the Bangladesh Payment and Settlement Systems Regulations, 2014.

Unlike conventional banks, digital banks will have no physical branches, sub-branches, ATMs, CDMs, or CRMs. All services will be delivered through mobile apps and digital platforms, ensuring 24/7 accessibility for customers.

To facilitate seamless transactions, digital banks will offer virtual cards, QR codes, and other tech-driven payment solutions, though no plastic cards will be issued. Customers, however, may use ATMs or agent banking services of other banks as needed.

The policy prohibits digital banks from opening letters of credit (LCs) or lending to large or medium-scale industries. They are, however, allowed to provide microloans and retail credit.

Additionally, each licensed digital bank must launch an Initial Public Offering (IPO) within five years of approval, with the offering amount equaling at least the founders’ initial investment.

Experts observe that digital banking will not replace traditional banking systems but rather usher in a new era of technology-driven financial services—accelerating financial inclusion and advancing Bangladesh’s smart economy vision.