Bangladesh Bank’s board has agreed to grant preliminary approval for the establishment of five digital banks in Bangladesh, including ventures backed by bKash, Robi’s parent company Axiata Limited, Bhutan’s DK Bank, VEON and Square Group.
The decision was made at a Bangladesh Bank board meeting chaired by Governor Mostaqur Rahman on Thursday. Bangladesh Bank will now issue Letters of Intent (LOIs) to the approved banks, after which they will be able to begin operations upon completion of the required procedures.
The five digital banks selected for preliminary approval are Digital Banking of Bhutan, sponsored by Bhutan’s DK Bank; bKash Digital Bank, sponsored by bKash shareholders; Nova Digital Bank, sponsored by Banglalink parent company VEON and Square Group; Boost Digital Bank, sponsored by Robi parent company Axiata Limited; and Kori Digital Bank.
The approval comes as questions over confidence and good governance in Bangladesh’s banking sector have intensified. Digital banks are set to mark a new chapter in the country’s financial system after more than three years of discussions, policy changes, application submissions, assessments and licensing complications.
Bangladesh Bank had earlier invited applications to establish digital banks during the interim government’s tenure. Thirteen institutions applied, involving leading industrial groups, microfinance organisations, mobile operators and mobile financial service providers.
Bangladesh Bank considered banking capability, the experience of sponsors, capital, technological infrastructure, cybersecurity and compliance with regulatory requirements during its assessment process. Eight institutions were initially considered eligible and presented for final approval, but the board ultimately granted preliminary approval to five.