The Bangladesh Bank on Sunday granted digital banking licences to Nagad Digital Bank PLC and Kori Digital PLC.
The decision was taken at a board meeting held at the Bangladesh Bank headquarters, with Governor Abdur Rouf Talukder in the chair.
Besides, three other applicants, each with support from different traditional banks, have been granted permission to establish digital banking platforms.
Furthermore, there is a possibility that three fintech firms may receive licences after a six-month monitoring period to assess the performance of the initial two digital banks.
Nagad is a digital financial service operating under the Bangladesh Post Office.
Kori Digital is an initiative of a consortium comprising ACI, Square, Ispahani, Paragon, Transcom and some other individuals. IT entrepreneur Habibullah N Karim, former managing director of MTB Anis A Khan, Raihan Shamsi and Mainuddin Monem of Abdul Monem Ltd are among the individuals leading Kori Digital.
Earlier, a total of 52 domestic and foreign entities filed applications for a licence to set up digital banks when the central bank initially intended to extend permits only for two or three banks.
Following the approval of these licences today, the central bank would issue a Letter of Intent (LOI) to Nagad and Kori.
The LOI will stipulate a timeline within which the digital banks would establish their infrastructure and launch their services.
Digital banks will function without any physical branches, sub-branches, or ATM booths, and they will not facilitate in-person transactions.
These operational guidelines for digital banks were officially made public by the central bank on 14 June this year.
Digital banks will be subject to governance under the Banking Company Act, as outlined in the central bank’s guidelines.
