Pakistan to Launch 5 Digital Retail Banks

In a big step for Pakistan’s financial world, the State Bank of Pakistan (SBP) has given the green light to establish five digital retail banks (DRBs). This move is a major upgrade for Pakistan’s banking sector.

The five approved entities are:

1. HugoBank Limited
2. KT Bank Pakistan Limited
3. Mashreq Bank Pakistan Limited
4. Raqami Islamic Digital Bank Limited
5. Telenor Microfinance Bank Limited

In January 2023, SBP granted these entities No Objection Certificates (NOCs), opening the door for them to set up digital banks in Pakistan. Now, after meeting the necessary requirements, they have received initial approval to gear up for offering digital financial services.

The noteworthy ceremony took place at the SBP Museum Building in Karachi, where Governor Jameel Ahmad awarded IPAs to the five proposed digital banks. The event was attended by various stakeholders, including sponsors of the DRBs, incumbent bank CEOs, Payment System Operators (PSOs)/Payment System Providers (PSPs), Electronic Money Institutions (EMIs), Fintechs, and SBP’s top management.

Governor Jameel Ahmad stressed the importance of introducing DRBs in Pakistan, highlighting their potential to improve the financial system.

Dr. Inayat Hussain, Deputy Governor of SBP, welcomed the participants and explained that these IPAs would help the proposed DRBs prepare for operational readiness, covering various aspects like governance, risk management, capital requirements, compliance, audit, consumer protection, business continuity, cybersecurity, product development, and technological infrastructure.

Once they are fully prepared, these institutions will need SBP’s approval to start their operations, marking a transformative phase in Pakistan’s financial sector. This development promises to bring more accessible and efficient financial services to the people of Pakistan, ushering in a new era of digital banking in the country.