Cenbank raises digital bank capital requirement to Tk300cr
Earlier, as per the digital bank guideline formulated in June 2023, the capital requirement was set at Tk125 crore. By comparison, a conventional bank needs Tk500 crore in paid-up capital to secure a licence
The Bangladesh Bank has raised the minimum paid-up capital requirement for setting up a digital bank to Tk300 crore, more than double the earlier threshold of Tk125 crore.
The new requirement was announced today through a central bank circular signed by Deputy Governor Dr Md Kabir Ahmed.
Earlier, as per the digital bank guideline formulated in June 2023, the capital requirement was set at Tk125 crore. By comparison, a conventional bank needs Tk500 crore in paid-up capital to secure a licence.
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According to the guideline, digital bank licences will be issued under the Bank Company Act 1991, while payment services will operate under the Bangladesh Payment and Settlement System Regulations, 2014.
Digital bank, a new concept in Bangladesh, is a financial institution that operates primarily or entirely online, offering services through websites and mobile phone apps.
Unlike traditional lenders, digital banks will have no branch network – only a headquarters – delivering services entirely through online platforms, the 2023 guideline stated.
However, business, governance and operational standards applicable to conventional banks will also apply to them.
Under the current rules, a digital bank must go for an initial public offering (IPO) within five years from the date of the licence issuance by the central bank, and the IPO amount should be a minimum of the sponsor's initial contribution.
Bangladesh's move towards digital banks come at a time when new-generation banks worldwide are moving away from brick-and-mortar operations in favour of digital-first models. Neighbouring India and Pakistan introduced digital banks in 2022.
