Cenbank to start digital bank licensing process in August: Governor
While a definitive number of licences to be issued remains undisclosed, the governor indicated that the strength of the applications would determine the final figure. “There won’t be too many licences. We will proceed in phases.”
Highlights:
- Previous applicants can reapply
- Number of licences won't be too many
- Applicants must have capacity to invest over Tk2,000cr
- MFS providers cannot directly provide nano loans
The Bangladesh Bank is set to open the application process for digital bank licences in August, according to Governor Ahsan H Mansur.
In an exclusive interview with TBS, Governor Mansur confirmed that entities that previously applied for a digital banking licence would be eligible to reapply. "We will quickly verify the applications and move to the selection process," he said.
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While a definitive number of licences to be issued remains undisclosed, the governor indicated that the strength of the applications would determine the final figure. "There won't be too many licences. We will proceed in phases."
He emphasised that potential digital bank operators must have the capacity to invest between Tk2,000 crore and Tk3,000 crore. "Success in digital banking requires a long-term vision. For example, it took bKash 12 years to become profitable. Nagad may require a decade as well."
Regarding microloans, the governor clarified that existing mobile financial services (MFS) providers cannot directly disburse nano loans. "To do so, they must either set up a digital bank subsidiary or obtain a separate licence," he explained.
Currently, MFS providers can offer loans up to Tk50,000. However, the governor hinted at a future where this limit could be increased to Tk1 lakh, Tk1.5 lakh, or even Tk5 lakh –provided that the institutions demonstrate adequate financial strength, investment capacity, and operational competence.
While a definitive number of licences to be issued remains undisclosed, the governor indicated that the strength of the applications would determine the final figure. "There won't be too many licences. We will proceed in phases."
On 14 June 2023, the Bangladesh Bank formulated guidelines for the establishment of "Digital Banks." Subsequently, applications were invited between 21 June and 17 August of the same year, with 52 applications being submitted. Of these, eight received preliminary approval, and two banks obtained LOC.
Following the fall of the Sheikh Hasina-led government on 5 August 2024, the Bangladesh Bank suspended Nagad Digital Bank's licence.
Subsequently, after taking office as Bangladesh Bank governor in August last year, Ahsan H Mansur announced a complete review of the digital bank licensing process.
Meanwhile, Kori Digital, which received a Letter of Intent (LOI) in October 2023, failed to submit the necessary documents to the central bank within the stipulated deadline to secure its final licence.
Anis A Khan, a sponsor of Kori Digital, informed TBS that they submitted all required documents, along with the fees, a month ago as per the central bank's instructions. He added, "We are now awaiting Bangladesh Bank's final licence approval."
According to Anis Khan, out of the Tk200 crore in paid-up capital, Tk72 crore is expected to come from foreign investors as technology support. The Bangladesh Bank has already approved a proposal in this regard.
World Bank flags bias in digital bank licensing process
The World Bank Group has identified a lack of transparency and a potential for politically-linked bias in Bangladesh's digital banking licence allocation process in 2023. At that time, Nagad and Kori were selected from 52 applicants to receive digital banking licences.
A report titled "Bangladesh: Country Private Sector Diagnostic" stated that corruption, political interference, and regulatory ambiguity are major impediments to the progress of the country's private sector.
The report further highlighted, "A lack of transparency and accountability in awarding contracts and licences hinders innovation and entrepreneurial activities." The report was prepared by two World Bank Group member institutions, the International Finance Corporation and the Multilateral Investment Guarantee Agency, with its findings released at the Bangladesh Investment Summit in April 2025.
The report also noted that the regulatory body followed an arbitrary process where "some applicants were assured of additional licences in the future, while others were given an ambiguous 'digital banking window.'"
