It is becoming easier to launch a digital bank in Pakistan. State Bank of Pakistan has issued a total of five no-objection certificates for all five applicants who want to establish digital banks in Pakistan. The central bank implemented a Licensing and Regulatory Framework for Digital Banks, in accordance with global standards, in January 2022 and determined to grant up to five digital bank licenses.
As per a statement from the central bank, the applicants who have received no-objection certificates include:
- Mashreq Bank
- Easy Paisa DB
- Raqami
- KT Bank
- Hugo Bank
Mashreq Bank belongs to Mashreq Bank UAE while EasyPaisa DB belongs to Ali Pay Holding Ltd and Telenor Pakistan B.V. Raqami belongs to Kuwait Investment Authority via Enertech Holding Co and PKIC whereas KT Bank is part of Kuda Technologies Lts, City School Pvt Ltd and Fatima Fertilizer Ltd. Lastly, Hugo Bank belongs to Atlas Consolidated Pte, Ltd, Getz Bros & CO. and M & P Pakistan Pvt Ltd.
NOCs a Huge Success for Online Banking in Pakistan
The introduction of the Regulatory Framework for Digital Banks was the initial move to establish fully-fledged digital banks in Pakistan. These banks are predicted to offer all banking services digitally, eliminating the requirement for customers to physically visit branches.
As a response to the State Bank of Pakistan’s Licensing and Regulatory Framework for digital banks, it received 20 applications from a diverse group of interested parties, including commercial banks, microfinance banks, electronic money institutions, and fintech firms by March 31, 2022.
Additionally, many foreign players such as venture capital firms already active in the digital banking sector also expressed their desire to enter the Pakistani market either alone or in partnership with local companies.
The five applicants were chosen through a thorough and stringent evaluation process, based on the requirements of the Framework. The applicants were evaluated on various criteria and all were given the opportunity to present their business proposals to the State Bank of Pakistan.
This is a positive step forward in the digital bank sector of the country. If done right, it can truly change the bank spectrum in Pakistan.