SBP grants approval for five new digital retail banks.

SBP grants approval for five new digital retail banks.

    The State Bank of Pakistan (SBP) has approved in-principle licenses for five digital retail banks, aiming to promote innovation, financial inclusion, and accessible digital financial services. Governor Jameel Ahmad granted these licenses to Hugo Bank Limited, KT Bank Pakistan Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited, and Telenor Microfinance Bank Limited during a ceremony at the SBP Museum Building in Karachi.

    The event included the participation of sponsors of proposed digital retail banks (DRBs), CEOs of existing banks, Payment System Operators (PSOs), Payment System Providers (PSPs), Electronic Money Institutions (EMIs), Fintechs, and senior SBP officials. Notably, in January 2023, the central bank issued NoCs to five applicants to establish digital banks in Pakistan. After meeting the required conditions, these entities have now received in-principle approval to prepare for the operational launch of digital financial services.

    Once these institutions achieve the necessary operational preparedness, they must obtain SBP's approval to begin their operations. Earlier in the year, SBP granted a "No Objection Certificate (NOC)" to the proposed digital retail banks, enabling them to register as Public Limited Companies with the Securities and Exchange Commission of Pakistan (SECP). The selection of these institutions followed a rigorous evaluation process, considering various factors such as fitness, experience, financial stability, business and implementation plans, funding, capital, IT and cybersecurity strategies, and outsourcing arrangements.