Five digital banks get LoIs from Bangladesh Bank

Bangladesh Bank (BB) on Thursday issued letters of intent (LoIs) to five proposed digital banks for moving forward with their preparations for launching branchless banking services.

The decision was taken at a meeting of the central bank's board of directors chaired by Governor Md Mostaqur Rahman.

The five proposed digital banks are DK Digital Bank Ltd, backed by Bhutan's DK Bank; bKash Digital Bank, promoted by mobile financial service provider bKash; Nova Digital Bank, a venture of Banglalink; Boost Digital Bank, promoted by Robi Axiata; and Kori, founded by Habibullah N Karim, who is also the CEO of Technohaven.

Bangladesh Bank spokesperson Arief Hossain Khan confirmed the development.

The issuance of a LoI does not amount to a final banking licence. The applicants will have to fulfill a number of conditions, including establishing the required technological infrastructure and meeting regulatory requirements, before they can begin banking operations.

Under Bangladesh Bank's digital bank policy issued on June 14, 2023, a digital bank must have a minimum paid-up capital of Tk 300 crore.

Digital banks will provide banking services entirely through digital platforms, such as websites and mobile applications. Unlike conventional banks, they will operate without physical branches and will maintain only a headquarters.

The latest move comes as Bangladesh Bank continues its efforts to expand digital banking services and promote wider financial inclusion.