Bangladesh Bank has announced the opening of applications for the establishment of the nation’s first digital bank. Applications will be accepted from September 1 to September 30 of this year. Applicants are required to pay a fee of five lakh taka, and all services will be entirely digital. This information was shared by the central bank in a notification on Tuesday, August 26.
The notification indicated that in light of global advancements in the technology-driven financial sector, Bangladesh Bank has initiated the process to approve digital banks. The objective is to enhance the efficiency of the financial sector, broaden the range of services, and provide financing opportunities for small, cottage, and medium-sized enterprises (CMSEs).
According to Bangladesh Bank, the primary aim of this initiative is to promote sustainable economic growth and contribute to job creation by leveraging the opportunities presented by the fourth industrial revolution. They view digital banks as a crucial mechanism for facilitating credit access, particularly for marginalized communities.
Applicants must submit a non-refundable fee of five lakh taka along with their formal proposal. This payment should be made to Bangladesh Bank via a bank draft or pay order from any scheduled bank. Applications that do not meet the specified requirements will be rejected.
Furthermore, in addition to submitting the application form in person, all necessary documents must also be sent via email. Comprehensive guidelines have been made available on the Bangladesh Bank website.
In a notice signed by Md. Bayazid Sarkar, General Manager of the Banking Regulation and Policy Department (BRPD) at Bangladesh Bank, it is stated that the global financial landscape has evolved due to ongoing technological advancements. In response to the challenges posed by these changes, the central bank is prioritizing the enhancement of efficiency in delivering financial products and services, as well as the creation of a more extensive financial system.
Previously, on June 14, 2023, Bangladesh Bank released the Digital Bank Policy. Under this policy, the minimum paid-up capital required to set up a digital bank was set at Tk 125 crore. However, the central bank has recently raised this amount to Tk 3 billion. For a conventional bank license, a capital of Tk 5 billion is necessary. The issuance of a digital bank license will be governed by the Bank Companies Act of 1991. Payment services will operate in accordance with the Bangladesh Payment and Settlement System Regulation of 2014.
As per the guidelines established by Bangladesh Bank, a head office will be necessary for the operation of the digital bank. There will be no requirement for physical establishments to provide services. In other words, this bank will not offer over-the-counter (OTC) services. The digital bank will not maintain its own branches, sub-branches, ATMs, CDMs, or CRMs. All services will be delivered through an app, accessible via mobile phones or digital devices.
