SBP receives 20 applications for digital bank licenses

The State Bank of Pakistan (SBP) has received 20 applications for digital bank licenses as it concluded the process as per its announced deadline of March 31, 2022.

The State Bank of Pakistan (SBP) has received 20 applications for digital bank licenses as it concluded the process as per its announced deadline of March 31, 2022, a statement said on Wednesday.

“The application process registered an overwhelming response whereby SBP received twenty (20) applications from a diverse range of applicants, including domestic commercial banks, microfinance banks, electronic money institutions and FinTech players,” the SBP said.

“Foreign players already operating in the digital banking space overseas have also expressed their interest to venture into the Pakistani market,” it added.

The strong interest shown by both local and international players into SBP’s digital banks’ initiative reflects their confidence in the financial sector of Pakistan and the potential of the investment opportunities available in the country, it noted.

During the application window opened from January 3 till March 31, 2022, the SBP has remained extensively engaged with all the interested applicants and held various rounds of discussions / meetings with all of them, according to the central bank.

Moreover, the SBP team also remained committed to provide exclusive support and necessary facilitation required for preparation and submission of applications to all the applicants.

This initiative of the central bank would greatly help in providing financial services to underserved and unserved segments of the society.

Earlier this year on January 3, 2022, SBP launched its “Licensing and Regulatory Framework for Digital Banks”.

While setting the foundation for the customers’ convenience, providing cost effective digital financial services and promoting innovation for achieving SBP’s overall goal of digitisation in the banking business, the framework primarily aimed at providing financial services to unserved and underserved segments of the society. To achieve the intended objectives under this regulatory initiative, the applications were solicited from interested applicants who could demonstrate strong value proposition, robustness of technological infrastructure, sufficiency of financial strength, high level of technical expertise and effectiveness of their risk management culture in the digital banks’ space. The SBP developed and finalised this framework after an extensive consultative process.

Initially, SBP released an exposure draft of this framework and a targeted survey was launched to invite feedback from a wide range of local as well as international stakeholders.

Subsequently, a number of meetings were held with all the stakeholders to further enrich the consultative exercise.

Later, SBP also organised two interactive webinars titled ‘Digital Banks – A New Era in Pakistan’ and ‘The Promise of Digital Banks’ with leading local as well as international speakers to discuss the opportunities and challenges associated with digital banks to disseminate awareness about Pakistan’s digital bank licensing framework.

This news was originally published by The News.