Daily Times

The State Bank of Pakistan (SBP) stated on Wednesday that it has received 20 applications for digital bank licences, having completed the procedure by the previously scheduled deadline of March 31. Financial technology companies (fintech) and electronic money institutions (EMIs) were among the applicants, the central bank stated.

Additional global digital banking companies have shown interest in entering the Pakistani industry, according to a report. “The high interest displayed by both local and international participants in SBP’s digital banks programme demonstrates their confidence in the financial sector of Pakistan and the potential of the investment possibilities available in Pakistan,” SBP stated.

In addition to laying the groundwork for SBP’s general goal of digitalization in the banking industry and offering clients convenient, cost-effective digital financial services, the Framework also aims to provide financial services to underserved and unserved groups of society. Applications were sought from interested parties who can demonstrate strong value propositions, robust technological infrastructure, sufficient financial strength, high levels of technical expertise, and effectiveness of their risk management culture in the Digital Banks’ space to achieve the intended objectives under this regulatory initiative to solicit.

“SBP developed and finalized this Framework after an extensive consultative process. Initially, SBP released an exposure draft of this framework, and a targeted survey was launched to invite feedback from a wide range of local as well as international stakeholders. Subsequently, a number of meetings were held with all the stakeholders to further enrich the consultative exercise. Later, SBP also organized two interactive webinars titled ‘Digital Banks – A New Era in Pakistan’ and ‘The Promise of Digital Banks’ with leading local as well as international speakers to discuss the opportunities and challenges associated with digital banks as well as disseminate awareness about Pakistan’s digital bank licensing framework,” the central bank stated. The term “digital bank” refers to a financial institution that provides a wide range of financial goods and services largely through digital platforms or electronic channels rather than physical branches.