Bangladesh Bank has given initial approval to four new digital banks and decided to issue them letters of intent (LoIs), marking another step towards expanding technology-driven banking services in the country.
The four institutions are bKash Digital Bank, Boost Digital Bank backed by Robi Axiata, DK Digital Bank backed by Bhutan’s DK Bank, and Nova Digital Bank backed by Banglalink and Square Group.
The central bank has also decided to issue an LoI to Kori Digital Bank, which had received initial approval earlier. With that decision, the total number of digital banks with initial approval now stands at five.
The decisions were taken at a meeting of the Bangladesh Bank board of directors on Thursday, 24 September, chaired by Governor Mostaqur Rahman.
An LoI does not amount to a final banking licence. The selected institutions will have to fulfil the conditions set by Bangladesh Bank before they can obtain final approval and begin operations. The process is intended to ensure that prospective digital banks meet the regulator’s requirements before offering banking services to customers.
According to Bangladesh Bank sources, 12 institutions had submitted applications to establish digital banks in Bangladesh. Following scrutiny of the applications, the central bank’s board selected four institutions for the latest round of initial approval and LoIs.
The other applicants included British Bangla Digital Bank PLC, Amar Digital Bank-22 MFI, 36 Digital Bank PLC, Amar Bank, App Bank-Farmers, Maitree Digital Bank PLC, Upokari Digital Bank and Munafa Islami Digital Bank-Akij.
Digital banks are designed to provide banking services primarily through digital channels rather than a conventional branch network. Customers are expected to be able to access services through technology-based platforms, potentially making account opening, payments, transfers and other financial transactions more accessible.
The latest approvals also bring major players from the mobile financial services, telecommunications and corporate sectors into the emerging digital banking landscape. bKash is one of the country’s major mobile financial service providers, while Robi Axiata is a leading telecommunications operator. The proposed participation of Banglalink and Square Group, along with Bhutan’s DK Bank, also reflects the range of business interests seeking a role in the new banking model.
Bangladesh’s digital banking initiative dates back to 2023. In October that year, Bangladesh Bank approved Nagad Digital Bank PLC and Kori Digital Bank PLC to establish digital banks.
Following the change of government, the central bank suspended the digital banking licences of those two institutions and subsequently began reviewing fresh applications under a revised process.
The latest decision therefore represents a fresh stage in the development of digital banking in Bangladesh. Kori Digital Bank’s inclusion means an institution that had previously received initial approval has now been brought into the latest LoI process, while four new applicants have also moved forward.
For the newly approved institutions, the next stage will involve meeting the regulatory and operational requirements laid down by Bangladesh Bank. Only after completing those requirements and securing final licences will they be able to commence full banking operations.
The move comes as Bangladesh’s financial sector continues to increase its reliance on digital channels. The proposed digital banks are expected to operate within the regulatory framework established by the central bank, with their ability to begin serving customers ultimately dependent on their compliance with the conditions attached to the approval process.
