The State Bank of Pakistan (SBP) has received 20 applications for digital bank licenses following its announcement of 31 March as the deadline.
The interested companies are from a diverse range of applicants, including domestic commercial banks, microfinance banks, electronic money institutions, and FinTech players.
It was previously reported that as many as 40 companies were interested in applying for five licenses for digital banks but only 20 had successfully submitted applications as per the criteria.
Foreign players that are already operating in the digital banking space overseas have also expressed their keenness to venture into the Pakistani market. The strong interest shown by both local and international players in the SBP’s digital banks’ initiative reflects their confidence in Pakistan’s financial sector and the potential of the investment opportunities available in the country.
The SBP launched its ‘Licensing and Regulatory Framework for Digital Banks’ on 3 January. While a setting foundation for customers’ convenience, providing cost-effective digital financial services and promoting innovation to fulfill the SBP’s overall goal of digitization in the banking business, the framework is primarily aimed at providing financial services to the unserved and underserved segments of society.
To achieve the intended objectives under this regulatory initiative, the applications were solicited from interested applicants who could demonstrate a strong value proposition, the robustness of technological infrastructure, sufficiency of financial strength, high levels of technical expertise, and effectiveness of their risk management culture in the Digital Banks’ space.
The SBP developed and finalized this framework after an extensive consultative process. It had initially released an exposure draft of the framework and a targeted survey was launched to invite feedback from a wide range of local and international stakeholders.
Subsequently, several meetings were held with all the stakeholders to enrich the consultative exercise. Later on, the SBP had also organized two interactive webinars titled ‘Digital Banks – A New Era in Pakistan’ and ‘The Promise of Digital Banks’ with leading local and international speakers to discuss the opportunities and challenges associated with digital banks and to disseminate awareness about Pakistan’s digital bank licensing framework.
During the application window that remained open from 3 January to 31 March 2022, the SBP has remained extensively engaged with all the interested applicants and held various rounds of discussions/meetings with all of them. Its team also remained committed to providing exclusive support and the necessary facilitation required for the preparation and submission of applications to all the applicants. This initiative by the central bank will help in providing financial services to the underserved and unserved segments of society.
Source: Pro Pakistan