Pathao awaits regulatory nod to set up digital bank

Pathao, a leading digital services company in Bangladesh, has applied for a licence to set up a digital bank, reports bdnews24.com.
The proposed Pathao Digital Bank will mark a 'natural evolution' of the company's commitment to empowering the lives of its vast user base of 10 million consumers and half a million drivers, delivery agents, and SME entrepreneurs, it said in a statement.

Bangladesh's young, tech-savvy generation forms a substantial demographic, many of whom already utilise Pathao's services extensively. Despite their potential, this demographic has remained underserved by the traditional financial sector, according to Pathao.
While many are eligible for and require access to credit, traditional banks struggle to evaluate their creditworthiness due to a lack of data and technological capabilities.
Pathao, equipped with comprehensive customer insights, advanced analytics, and robust engineering capabilities, believes it is uniquely positioned to address the financial accessibility gap for this demographic.
The company highlighted its Pathao Pay Later innovation, the country's largest Buy Now Pay Later (BNPL) solution, as a testament to this vision. Pathao Pay Later caters to over 100,000 of the platform's most dedicated users, maintaining notably low delinquency rates since its launch in November, 2021.
"Pathao is far more than a brand, or a suite of products -- it is a lifestyle. Just as it has radically transformed urban transportation and the gig economy in Bangladesh, Pathao Digital Bank will reshape banking in Bangladesh. With this, we believe we can catalyse an important growth stage of the Bangladesh economy," said Fahim Ahmed, managing director and CEO of Pathao.
Bangladesh announced plans to launch a digital bank in the current fiscal year as part of an effort to 'broaden and accelerate financial inclusion'.
Bangladesh Bank has imposed a requirement of Tk 1.25 billion as paid-up capital to ensure that only financially stable companies can acquire a digital banking licence. Moreover, the central bank has said that loan defaulters will be excluded from the initiative.
In Bangladesh, the mobile financial service network is operated by over 1.1 million agents and processes an average of more than 10 million transactions, totalling around Tk 22.95 billion, each day.
The digital banking initiative aims to further boost the volume and value of transactions conducted through these platforms.
With a range of services planned, including convenient bill payments for electricity, gas, water, student fees, service charges, and government fees, the digital banking initiative aims to provide faster and more affordable options for customers compared to traditional payment methods.