A much-hyped regulatory move for licensing digital banks gets caught up in limbo again, to the frustration of aspirants who literally shut their preparation amid an inordinate delay.
Sources at Bangladesh Bank (BB) have said the central bank is still in wait to understand the newly-elected government's view regarding the possible virtual-banking operations, leading to such stalemate.
Under such unexpected circumstances, officials, bankers and technologists air fear of early nemesis before operation of the new form of AI-driven banking services, believed to play a significant role in achieving the regulator's target of cashless society.
Seeking anonymity, a BB official says 13 entities, including mobile financial service providers, telecoms operators, commercial banks, and large conglomerates, have applied to the regulator for licence to run digital banks.
After various evaluation processes, the official says, five were shortlisted and the central bank under the leadership of immediate-past governor Dr Ahsan H. Mansur put forward it to a board meeting just a day before the newly-elected government took charge following the February-12 general election.
But the board meeting ended just sharing progress in the evaluation among the board members following a strong protest by a large group of the central bankers against the desperate move to issue digital-bank licences. Couple of days after that tense board meeting, the then BB governor was replaced by Mostaqur Rahman.
"Since then, the licensing process virtually remains at halt as the BB is now waiting to understand the newly-elected government's views regarding the licensing process," the central banker told The Financial Express.
Another BB official says the governor last Thursday sat with the department concerned and he was briefed over the progress.
"The governor will fly for Washington to attend World Bank's Spring Meeting soon. And the briefing was a part of the governor's preparation. In fact, the licensing process gets caught up in limbo," he adds.
bKash, one of the country's leading mobile financial-service providers, applied for 'bKash Digital Bank'.
VEON and Square have jointly applied for 'Nova Digital Bank'. Telecoms operator Robi submitted an application for 'Boost', while conglomerate Akij Resources applied for 'Munafa Islami Digital Bank'.
Other applicants in the queue include Japan-Bangla Digital Bank by DBL Group, British Bangla Digital Bank PLC, Digital Banking of Bhutan by DK Bank, Amar Digital Bank by 22 microfinance institutions, 36 Digital Bank PLC by 16 individuals, Amar Bank by a group of NGOs, App Bank by a UK-based investor, Moitri Digital Bank PLC by microfinance institution ASA, and Upokari Digital Bank by IT Solutions Ltd.
The chief executive of a proposed digital bank, on condition that he not be quoted by name, says they recently communicated with the central bankers concerned regarding the progress but yet to get any satisfactory response.
Chief executive of a proposed digital bank, on condition not to disclose his identity, said they recently communicated with the central bankers concerned regarding the progress but yet to get any satisfactory response.
He says the inordinate delays by the regulator in awarding the licence have badly impacted their preparation. "This is very frustrating but we cannot say anything because it could impact our chances," he told the FE.
The banking regulator first issued a comprehensive guideline for digital bank before seeking application for licence from the interested companies in June in 2023, during Sheikh Hasina's governing regime, and some 56 companies and consortiums submitted applications.
After screening proposals of the participants, the BB issued letter of intent (LoI) to two companies -- Nagad Digital Bank and Kori Digital Bank. But the move went in vain as both companies failed to comply with the regulatory conditions to become eligible for getting licence.
Following changeover in state power after the July-August mass uprising in 2024, the leadership in the central bank was changed and licensing was suspended before re-inviting fresh applications in August last year.
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