SBP approves five digital retail banks

KARACHI - The State Bank of Pakistan (SBP), in a bid to foster innovation, financial inclusion and availability of affordable digital financial services, granted in-principle approval (IPA) for establishing five digital retail banks on Wednesday.

Governor SBP, Jameel Ahmad awarded IPAs to the five proposed digital banks- HugoBank Limited, KT Bank Pakistan Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited and Telenor Microfinance Bank Limited- in a ceremony at SBP Museum Building, said a statement issued here.

The event was attended by sponsors of proposed DRBs, CEOs of incumbent banks, Payment System Operators (PSOs), Payment System Providers (PSPs), Electronic Money Institutions (EMIs), Fintechs and SBP’s top management.

It is pertinent to mention that the central bank had issued NoCs to five successful applicants for establishing digital banks in Pakistan in January 2023 and after fulfilment of the necessary requirements, these entities have now been granted in-principle approval to prepare themselves operationally to launch the digital financial services.

Upon attaining operational readiness, these institutions will be required to seek approval of SBP for the commencement of their operations.

Earlier this year, SBP issued “No Objection Certificate (NOC)” to the proposed DRBs allowing them to incorporate as a Public Limited Company with Securities and Exchange Commission of Pakistan (SECP).

These institutions were selected after a thorough and rigorous evaluation process based on a comprehensive set of parameters including fitness and propriety, experience and financial strength; business plan; implementation plan; funding and capital plan; IT and cybersecurity strategy and outsourcing arrangements.