In the last two years, digital banking has become the new normal and more people are now comfortable with having their financial transactions through digital platforms instead of visiting the banks physically. In order to further accelerate digital payments, the State Bank of Pakistan has decided to issue five licenses for setting up digital banks in the country. Digital Banking licenses to new companies will enhance financial inclusion through affordable and cost-effective digital financial services.
Last Date to Register for digital banking licenses is March 1
While telling about this, Central Bank said in a statement:
“In line with international best practices and assessment of the overall banking situation in Pakistan, SBP has decided to initially issue up to five (5) digital banks’ licenses, which essentially means that SBP is looking to attract players with a strong value proposition, a robust technological infrastructure, sufficient financial strength, technical expertise, and effective risk management culture”
For this, the SBP has given the date of March 1, 2022, to apply for licenses to set up digital banks. Under this, the SBP plans to grant two types of digital bank licenses: Digital Retail Bank (DRB); and, Digital Full Bank (DFB).
With DRBs, the banks would be able to focus on retail customers only whereas DFBs would deal with retail customers as well as businesses and corporate customers. Govt has allocated a budget of Rs1.5 billion for DRBs during the pilot phase which will be increased to Rs4 billion in the next three years.
By 2022, SBP plans to add more banks in digital financial units which will expand the financial ecosystem in Pakistan.
Moreover, most of the customers of digital banks want to have Shariah-compliant services. Due to this, DRBs and DFBs can be obtained from both conventional and Islamic variants.