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In a significant move to promote innovation, financial inclusion, and the accessibility of affordable digital financial services, the State Bank of Pakistan (SBP) has granted In-Principle Approval (IPA) for the establishment of five digital retail banks, as announced in a press release today.
These banks include HugoBank Limited, KT Bank Pakistan Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited, and Telenor Microfinance Bank Limited.
This momentous decision follows SBP’s issuance of No Objection Certificates (NOCs) to these five successful applicants in January 2023, demonstrating the regulator’s commitment to driving digital banking innovation in Pakistan.
During the official ceremony, Mr. Jameel Ahmad, Governor of SBP, awarded the IPAs to these five pioneers in the digital banking sector, highlighting the historical significance of this achievement.
In his keynote address, Governor Jameel underscored the profound benefits that Digital Retail Banks (DRBs) bring to the financial system while acknowledging the challenges they face in this dynamic sector.
Governor Jameel also shed light on other crucial regulatory initiatives aimed at fostering a robust digital financial ecosystem and reassured all stakeholders of SBP’s unwavering dedication to shaping a bright, innovative, and digitally empowered future for banking in Pakistan.
He firmly conveyed SBP’s commitment to enhancing financial inclusivity, promoting innovation, and ensuring responsiveness to the needs of Pakistan’s citizens.
Governor Jameel expressed optimism that these digital banks, once operational, would play a pivotal role in shaping a thriving digital ecosystem, revolutionizing the customer experience, and providing affordable digital financial services, including credit access, to underserved segments of society.
Dr. Inayat Hussain, Deputy Governor of the State Bank of Pakistan, also emphasized the critical role of these IPAs in enabling the proposed DRBs to enhance their operational readiness across various aspects, including governance, risk management, capital requirements, compliance, audit, consumer protection, business continuity, cybersecurity, product development, technological infrastructure deployment, and the formulation of relevant policies, processes, and procedures.
It is worth noting that earlier this year, SBP issued a “No Objection Certificate (NOC)” to these DRBs, allowing them to incorporate as Public Limited Companies with the Securities and Exchange Commission of Pakistan (SECP).
These institutions underwent a rigorous evaluation process based on comprehensive parameters, including fitness and propriety, experience and financial strength, business plan, implementation plan, funding and capital plan, IT and cybersecurity strategy, and outsourcing arrangements.
As these institutions progress toward operational readiness, they will require SBP’s final approval to commence their operations.
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