BB invites applications for digital bank licence

Bangladesh Bank has invited applications from entrepreneurs interested in establishing digital banks and delivering financial products efficiently through branchless operations. 

It has opened a portal for the applications and said it will accept applications until August 1 this year.

Applicants will have to pay Tk 500,000 as a non-refundable application processing fee through the web portal, said the central bank in a notice.

In its notice seeking the applications, the central bank said digital innovation is continuously modifying the landscape of the financial system all over the world.

It said BB promotes an enabling regulatory environment allowing innovation to make a robust, efficient and secured financial system.

Digital banks will provide financial services alongside the existing 61 conventional banks.

"Accordingly, BB recognises the role of digital platforms and usage of artificial intelligence in driving greater efficiency in the delivery of financial products and services and in widening the outreach of the financial system," said the central bank.

The BB's move comes within a week after it approved guidelines regarding the establishment of digital banks which will provide financial services alongside the existing 61 conventional banks.

On June 1, Finance Minister AHM Mustafa Kamal, in his budget speech, said a central bank committee was working to draw up strategies to broaden financial inclusion.

The BB said investors willing to set up a digital bank will have to have a minimum paid-up capital of Tk 125 crore and the capital will have to come from sponsors.

The entity willing to set up a digital bank must be a public limited company. The minimum shareholding stake of each sponsor shall be Tk 50 lakh, it said.

"Sponsors' contribution to the share capital of the proposed digital bank will be required to be out of net worth declared to the tax authorities," said the BB in the notice issued on June 21.

"Sponsors' contribution out of borrowings from bank or financial institutions or from anywhere else, even from family members, shall not be acceptable," it said.

The central bank said the sponsors or directors of digital banks must meet criteria of a fit and proper test (FPT).

In its guideline, BB said digital banks will not be allowed to provide any service to clients directly through physical counters and can not issue any physical instruments.