Maximum 20 companies will get Digital Bank license
None applied even after 15 days
At present, there are 61 conventional banks in the country. Besides, there are 13 MFS companies in this sector which have started their journey on bank based model. In such a reality, Bangladesh Bank is going to give license to a maximum of 20 Digital Bank to operate. The sector stakeholders believe that this new bank will create a competitive environment for innovation in the banking sector along with financial inclusion.
For that purpose, the Central Bank has started accepting online applications from a web portal on June 21 for submitting 'online applications'. There is a lot of interest among MFS and IT sector entrepreneurs in the bank, but there is still no 'quickness' in terms of license applications. Since there is an opportunity to submit the license by August 1, not a single application was submitted to get the license in the first week of the working day. Even after 15 days out of 42 days, not a single entrepreneur applied for.
However, the country's two MFS institutions, bKash and Nagad, have given an early glimpse of applying. Despite the strong interest, tech entrepreneurs' organization BASIS expressed regret at the lack of communication from the regulatory body on the matter.
Zakir Hossain, Executive Director (in charge) of Bangladesh Bank, the regulatory body for Digital Banks, said that a maximum of 20 companies will be given this license. Even if no one applies for digital bank till Eid holidays, applications will be available by July. LY will be given after verifying the applications received. This initiative has been taken with the aim of implementing Smart Bangladesh. Unbanked people will be brought into financial inclusion through this.
Economist Ahsan H. Mansoor, Chief Executive Officer of Policy Researchers Institute, has given an opinion in favor of not fixing the application period in such a situation. According to him, in addition to having the opportunity for organizations to apply according to their qualifications and capabilities, licenses should be given to a few organizations to ensure a competitive environment here.
At the outset, the digital bank online technology-based artificial intelligence, machine learning, blockchain and other advanced technologies of the fourth industrial revolution must be used to make cost-effective and innovative digital financial products and services available to the marginalized population. According to the conditions, a minimum of 50 per cent will be developed with IT professionals.
The regulatory body says that the minimum capital required to get the license of this bank is 150 crores. Without any branch, this bank's deposit collection, loan application and loan approval will all be app-based. Customers will get virtual card, QR code to facilitate the transaction. However, Digital Bank cannot open any Letter of Credit (LC). No loans can be given to large and medium industries either. Can only give small loans. A person who is in default of any bank or financial institution or any member of his family cannot be the entrepreneur of the proposed digital bank. The maximum number of directors from one family will be decided as per the Bank Companies Act. The Chief Executive Officer (CEO) of Digital Bank should have at least 15 years of experience in the banking profession, including at least five years of experience in technology-based banking, regulations, guidelines, circulars, etc.
It is worth noting that, the digital bank will basically run virtually. Any Bangladeshi can open an account in this bank with NID. The entire process from bank transaction to loan will be done in a virtual manner. It is believed that digital bank will remove the limitations of mobile banking. FFS institutions will get unique and independent addresses.
