Digital banks to be profitable within 3 years of operation

Digital banks in the country would be profitable within three years after starting their operation, said Deputy Governor of Bangladesh Bank (BB) Abu Farah Md Nasser.
"From my experience I have expectation that the digital banks will be profitable within three years," he said while speaking at a startup summit in a city hotel on Saturday.
However, he said the digital banks would be profitable only if they can efficiently cover untapped areas of the SME sector, which is actually the backbone of the country's business and economy.
The biggest-ever Bangladesh Startup Summit 2023 began in Dhaka with an eye to expanding startup interactions among enterprises, venture capitalists, angel investors, regulators and experts.
Startup Bangladesh Ltd, a flagship venture capital company of the government's Information and Communications Technology (ICT) Division, organised the event at InterContinental Hotel in the city.
Speaking as the guest of honour, the BB deputy governor said foreign investors are showing keen interest about digital banks, as the central bank is going to award its licence soon.
"Everyday foreign investors are asking about the status of digital banks, how many bank licences we are awarding, when we are starting, how to apply for the banks, etc," he said while speaking at a session titled 'How to Leapfrog Our Fintech Ecosystem - Way Forward'.
He said the digital bank guidelines kept the minimum capital requirement low, so that foreign investors can come.
"Now it is not the question whether the foreign investors are coming or not, rather the question is how many banks are getting licence."
However, he did not disclose the number of digital banks they are going to award.
The BB deputy governor noted that the digital banks would work for (ensuring) 100 per cent financial inclusion that the (conventional) banks or even mobile financial services (MFS) have failed to do.
"Real financial inclusions aren't taking place by the MFS," he said, expressing hope that the digital banks would fulfil the gaps.
He said the digital banks would gradually get other permissions, including foreign trade, if they can successfully operate for a few years.
"We are currently discouraging three things for the digital banks: large and medium lending and foreign trades," he added.
Sushmit Nath, Head of Visa Consulting and Analytics - India and South Asia, presented the keynote paper titled 'From Tradition to Transformation: Embracing Digital Banking and the Path to a Cashless Society'.
He said all the stakeholders concerned should work closely to create an enabling environment for digital banking.
He emphasised user-friendly interface, so that the digital banks can be inclusive for all.
Fahim Ahmed, CEO of Pathao; Mohammed Amir Dhedhi, Co-founder and CEO of Portonics Ltd; and Zubair Ahmed, Co-founder and CEO, Hishab; spoke as panellists.
They said Bangladesh lacks digital literacy, which is the key to become entirely cashless and digital.
They opined that the MFS can create breakthrough of the technology that would create an ecosystem for 100 per cent inclusion into digital banking.
They also emphasised the issue of trust, which can play a key role in digital banking.
Sajid Rahman, Managing Partner, MyAsiaVC, moderated the discussion.

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