Bangladesh Bank Grants Initial Approval to Four Digital Banks

Bangladesh Bank has taken a significant step towards reshaping the nation’s financial landscape by granting initial approval to four new digital banks. During a board of directors meeting chaired by Governor Mostaqur Rahman on Thursday, September 24, the central bank decided to issue letters of intent (LoIs) to these newly selected institutions, aiming to expand digital financial inclusion across the country.

The newly endorsed entities comprise a diverse mix of telecommunications giants, fintech leaders, and international partners. The approved institutions include bKash Digital Bank, Boost Digital Bank backed by Robi Axiata, DK Digital Bank supported by Bhutan’s DK Bank, and Nova Digital Bank formed through a strategic partnership between Banglalink and the Square Group. Additionally, the central bank decided to issue an LoI to Kori Digital Bank, an institution that had previously received initial backing. This brings the total count of digital banks holding initial approval to five.

Industry stakeholders note that securing a letter of intent represents an important preliminary phase rather than the final authorisation to operate. Before obtaining full operational licenses, each selected institution must strictly fulfil a comprehensive set of regulatory requirements and compliance benchmarks mandated by the central authority.

The selection process followed a rigorous evaluation of twelve competing proposals submitted by various corporate consortiums and financial entities. Among the other prominent applicants that vied for licenses were British Bangla Digital Bank PLC, Amar Digital Bank-22 MFI, 36 Digital Bank PLC, Amar Bank, App Bank-Farmers, Maitree Digital Bank PLC, Upokari Digital Bank, and Munafa Islami Digital Bank-Akij.

This latest wave of approvals follows a period of regulatory re-evaluation. In October 2023, under the previous administration, the central bank had initially cleared Nagad Digital Bank PLC and Kori Digital Bank PLC. However, following the subsequent political transition and the fall of the Awami League government, the regulatory body suspended those prior digital banking credentials. By reopening the evaluation process for fresh applicants, the central bank has now charted a renewed course for digital banking development.

Overview of Digital Bank Approvals and Applications