The State Bank of Pakistan (SBP) on Friday said that it has issued no-objection certificates (NOC) to five applicants for establishing digital banks in the country.
I) Easy Paisa DB (Telenor Pakistan B.V & Ali Pay Holding Ltd.),
II) Hugo Bank (Getz Bros & Co., Atlas Consolidated Pte. Ltd., and M & P Pakistan Pvt. Ltd.);
III) KT Bank (Kuda Technologies Ltd., Fatima Fertilizer Ltd., and City School Pvt. Ltd.);
IV) Mashreq Bank (Mashreq Bank UAE); and
V) Raqami (Kuwait Investment Authority through – PKIC and Enertech Holding Co.)
The SBP announced a license and regulatory framework for digital banks in January 2022.
“The Framework was the first step towards introducing full-fledged digital banks in Pakistan. The digital banks are expected to provide all the banking services through digital means without any need for their customers to visit the bank branches physically,” said the SBP.
Race to digital banking – final round
By March 31, 2022, the central bank has received twenty (20) applications in response to SBP’s licensing and regulatory framework for digital banks from a wide range of interested parties, including commercial banks, microfinance banks, electronic money institutions, and Fintech companies.
“Furthermore, a number of foreign participants, including venture capital firms working in the digital banking field, expressed a desire to enter the Pakistani market either directly or through partnerships with local businesses. The five (05) applications were chosen after a thorough and exacting evaluation procedure in accordance with the Framework’s requirements.
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“Applicants were assessed on various parameters that included fitness and propriety, experience and financial strength; business plan; implementation plan; funding and capital plan; IT and cybersecurity strategy and outsourcing arrangements, etc. Further, all the applicants were given the opportunity to present their business cases to SBP.
“Going forward, each of these five applicants will incorporate a public limited company with the Securities and Exchange Commission of Pakistan. Afterward, they will approach SBP for In-Principle Approval for demonstrating operational readiness and for the commencement of operations under the pilot phase. Subsequently, they will commercially launch their operations after obtaining SBP’s approval.”
The SBP said it expects that after the commencement of their operations, these digital banks will promote financial inclusion by providing affordable/cost-effective digital financial services including credit access to unserved and underserved segments of society.
