Bangladesh set to enter full digital banking era

Muhammad Ayub Ali :

Bangladesh is gearing up to launch fully digital, app-based banks that will operate without physical branches or ATMs. Customers will access all services such as opening accounts, transferring funds, and applying for loans anytime through secure mobile apps, marking a major step toward a cashless, tech-driven banking system.

The initiative aims to expand financial inclusion, cut banking costs, and accelerate digital transactions nationwide.

So far, 12 domestic and international institutions have applied to Bangladesh Bank for permission to operate these digital-only banks, reflecting strong market interest. If approved, Bangladesh will join nations like Singapore, South Korea, and the UK in adopting this modern banking model.
Bangladesh Bank has received digital bank license applications from 12 entities, including British Bangla Digital Bank PLC, Digital Banking of Bhutan-DK, Amar Digital Bank–22 MFI, 36 Digital Bank PLC, Boost-Robi, Amar Bank (proposed), App Bank–Farmers, Nova Digital Bank (Banglalink and Square), Maitree Digital Bank PLC, Beneficial Digital Bank, Munafa Islami Digital Bank–Akij, and bKash Digital Bank. All applications were submitted by the November 2 deadline.

Under the Bangladesh Bank policy issued on June 14, 2023, each digital bank must have at least Tk 300 crore in paid-up capital.

These banks will also operate under the Companies Act and maintain CRR and SLR requirements similar to traditional banks.

Digital banks in Bangladesh will not be allowed to lend to large or medium industries or open LCs. Their focus will be on microfinance, retail services, and digital transactions. Within five years of approval, they must launch an IPO equal to the founders’ initial investment.

These banks will operate entirely through apps—no branches or ATMs. Services will be offered via virtual cards, QR codes, and mobile transactions, with customers able to use ATMs or agent networks of other banks.

All transactions will fall under the Bangladesh Payment and Settlement System Regulation, 2014 to ensure security.

Defaulters and their family members cannot be founders. The CEO must have at least 15 years of banking experience, and at least half the board must be skilled in tech-based banking and cybersecurity.

Bangladesh Bank’s Arif Hossain Khan said the goal is to deliver affordable banking to small entrepreneurs and underserved communities, boosting financial inclusion and supporting a cashless society.

Applications will be screened first by Bangladesh Bank, then reviewed by a Technical and Business Committee. Eligible banks will receive a letter of intent before full approval, with operations expected to begin early next year.