SBP Introduces Liecencing and Framework of Digital Banks

SBP has issued a circular to initiate a new era of banking that defines how to get a license and operate a totally digital bank.

A digital bank would be a bank that provides all banking facilities from account opening to provide loans to customers through a digital platform wherein customers will not have to visit the branches.

SBP states in the circular that following the best international practices in terms of digital banking licensing for the complete digital banks will be issued.

State Bank is continuously working on the digitalization of banking products especially account opening and now it’s time to initiate a completely digital bank as the country is now quite ready for a digital bank where all banking services will be provided through a digital platform.

Earlier to this SBP has initiated certain digital initiatives like digital onboarding of the customers where customer can open their bank account digitally without visiting banks’ branches and can operate them from the comfort of their homes.

The account opening facility in digital onboarding is given on banks’ websites.

More digital services include Roshan Digital Bank Account for overseas Pakistanis, Raast Digital payment system and Asaan Mobile Account.

Asaan Mobile Account is quite a unique product wherein customers can open their bank account in any of the banks of their choice through their non-smartphones without the internet facility.

State Bank to issue two types of License under digital bank licensing

1-Retail Digital Bank(RDB)

2-Full Digital Bank(FDB)

Retail banks will be authorized to provide just retail activities to their customers like account opening whereas Full Digital Bank will be authorized or licensed to provide all banking facilities including bank account opening and providing bank loans.

The Digital Banks will have to maintain a central office only where they can employ their staff to manage all banking practices and to contact SBP.

Sharia Compliant Digital Bank

Islamic banking is growing at a higher pace as compared to conventional banking in the country hence SBP will provide licensing for both conventional and Sharia Compliant digital banks.

Capital Requirement for Digital Bank

There will be less demand for capital for digital bank opening as compared to the conventional bank opening.

Initially, Rs1.5 Billion will be required to open a digital bank which will be increased to Rs.4 billion over a period of three years.

Retail banks can also get a status of full Digital banks by completing a period of two years and meeting the minimum requirement of capital.

To initiate licensing of digital banks, the central bank has launched a targeted survey and has invited bids from locals and international stakeholders. For this purpose central has held extensive meetings to finalize the implementation of digital banks.

Application Process

Applications to establish a digital bank can be sent to

The last date to apply for a digital bank is 31 March 2022.

The interested applicants can apply for a digital bank by providing the required documents and the minimum capital.

So it is highly expected that a few digital banks will be operational in 2022 to start a new era of digitalization in the banking system.

The SBP circular regarding details of digital bank opening license and framework can be found on this link

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