With the inauguration of the State Bank of Pakistan’s (SBP) new license and regulatory framework, IT, technology, and financial service providers will now be able to set up or sponsor a digital bank. SBP will accept applications through March 31 and grant five licenses at first.
Because they have a large customer base, many e-wallet and eCommerce companies could take use of this opportunity to build up a digital bank alone or in collaboration.
The banking regulator, the SBP, has made it obligatory for new participants wishing to enter the banking market via a digital bank to have experienced staff capable of directing the bank according to established norms and regulations.
According to the SBP framework, any other person with at least three years of experience in financial services, financial technology, telecommunications, merchant aggregation technology platforms, Information Communication Technology (ICT), or other relevant digital or innovative financial and non-financial domains should be a minimum five percent equity participant in the proposed digital bank when applying to form it.
SBP has decided to issue up to five digital bank licences initially, in line with international best practices and an assessment of Pakistan’s overall banking situation. This essentially means that SBP is looking to attract players with a strong value proposition, a robust technological infrastructure, sufficient financial strength, technical expertise, and an effective risk management culture.
To read our blog on NayaPay Greenlighted by SBP for pilot operations, click here.
