Bangladesh Bank has increased the minimum capital requirement for establishing a digital bank to Tk 3 billion.
This information was provided in a notification issued by the central bank on Sunday (August 24).
Earlier, the Digital Bank Guidelines issued on June 14, 2023, set the minimum capital requirement for this sector at Tk 125 crore. In comparison, a conventional bank currently requires a paid-up capital of Tk 5 billion to obtain a license.
The notification states that the digital bank license will be granted in accordance with the Banking Companies Act, 1991. However, all types of payment services operated under the bank will continue to operate under the Bangladesh Payment and Settlement System Regulations, 2014.
In addition, digital banks must be listed on the stock market within five years of receiving their license. During this time, they must bring an initial public offering (IPO), the size of which must be equal to the initial investment of the entrepreneurs or sponsors.
The notification states that all rules and regulations related to business operations, good governance, and activities, as in conventional banks, will remain in place for digital banks.
Digital Bank is a complete online banking system, where all services will be provided through the internet. However, unlike conventional banks, there will be no separate branches; operations will be conducted from only one head office.
Bangladesh Bank has taken the initiative to approve digital banks at a time when many countries around the world are gradually moving away from branch-based banking to digital banking. South Asian neighbors India and Pakistan launched digital banks in 2022.
Currently, there are 61 conventional banks operating in the country, which has practically brought the banking sector to a state of oversaturation.
