Bangladesh Bank will give preliminary approval today for setting up digital banks

Bangladesh Bank will give preliminary approval for the establishment of cashless digital bank in the country on Sunday. Meanwhile, the central bank has also prepared a shortlist from 52 applications. With this list, Bangladesh Bank can issue letters to two to five digital banks with the approval of the board of directors meeting at the capital’s Motijheel head office. According to sources, applications lacking experienced manpower in digital banking are also shortlisted.

A source related to Bangladesh Bank said that the digital banks will be given time to finalize their infrastructure in that letter. However, the institutions that are not in the light of the bill have been excluded.

The application period for digital bank license ended on August 17 after the deadline was extended by 16 days. Among them, 52 applications were received from individuals or consortiums of 500 companies from various sectors including commercial banks, mobile financial service providers, food delivery and ride sharing platforms, IT service providers and pharmaceutical companies. Some applications also have 10 institutions. So, it can be said that more than five hundred companies are trying to get digital bank license.

According to the latest information, ten listed banks are forming a ‘Digital Bank’ to make transactions easier. The banks are – The City Bank, Mutual Trust Bank (MTB), National Credit and Commerce Bank (NCCB), Dutch-Bangla Bank Limited, Eastern Bank Limited (EBL), Trust Bank, Pubali Bank, Prime Bank and Midland Bank Limited. That is, these ten banks are the founders of digital banks. The paid up capital of the bank will be minimum Tk. 125 crore. Meanwhile, their board of directors has decided to invest Tk. 13 crore 88 lakh in the proposed Digi Ten Bank Plc.

Along with the proposed ‘bKash Digital Bank’ which applied earlier, there is the current entrepreneur BRAC Bank in the US along with ‘Money in Motion LLC, International Finance Corporation, Bill and Melinda Gates Foundation, Ant Group and Softbank Vision Fund. Existing and some other entrepreneurs of Nagad have also applied for formation of ‘Nagad Digital Bank Plc’.

Apart from this, three state-owned commercial banks, Sonali, Rupali, Agrani, have applied to form a digital bank in alliance. The application was submitted by mobile phone operator Banglalink and their parent company Veon.

A coalition led by United Commercial Bank’s (UCB) mobile financial services company Upay has applied. The name has been fixed as ‘Upay Digital Bank Plc’. This alliance includes private banks NRBC and Meghna. Along with UCB’s entrepreneurial company Aramit, which mainly manufactures corrugated sheets. Also in the alliance are UCB’s entrepreneurial company Navana Pharmaceuticals and IT services company Genex Infosys. Genex Infosys is a company owned by some of the entrepreneurs of NRBC.

Similarly, digital service provider Pathao has also shown interest in doing digital banking. The organization has applied to set up a bank named ‘Pathao Digital Bank’.

It may be noted that, there will be a head office for managing the digital bank. But it will be non-establishment in terms of service delivery. That is, this bank will not provide any over the counter (OTC) services. It will not have its own branch or sub-branch, ATM, CDM or CRM. All services will be app-based, on mobile or digital devices. A digital bank will provide services 24 hours a day and night. Digital Bank can offer virtual cards, QR codes and any other advanced technology-based products to facilitate customer transactions. However, no plastic card can be given for the transaction. However, customers can use other bank’s ATMs, agents and other services to avail the services of this bank. 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.