Written by The Banking Post
Bangladesh Bank has increased the minimum paid-up capital requirement for digital banks to Tk300 crore, up from Tk125 crore set in June 2023. A conventional bank, by comparison, requires Tk500 crore in capital to obtain a licence.
According to a circular issued on August 24, digital banks will be licensed under the Banking Company Act 1991, while payment services will follow the Bangladesh Payment and Settlement System Regulations, 2014.
The guideline also makes it mandatory for a digital bank to launch an initial public offering (IPO) within five years of receiving its licence, with the IPO amount at least equal to the sponsors’ initial contribution.
Unlike conventional banks, digital banks will operate without branches, maintaining only a headquarters while offering all services online. However, their business, governance, and operational standards will remain the same as traditional banks.
The central bank is introducing this new model as part of a global shift toward branchless digital banking. Similar initiatives were launched in India and Pakistan in 2022. Bangladesh currently has 61 conventional banks, making the sector highly saturated.
