Bangladesh Bank has invited applications to establish the first digital bank in Bangladesh. Applications can be submitted from September 1 to 30 this year, the central bank said in a notification on Tuesday.

The notification said that in the context Bangladesh Bank seeks applications for digital bankof global changes in the technology-based financial sector, Bangladesh Bank has taken the initiative to approve digital banks. The aim is to increase the efficiency of the financial sector, expand the range of services and facilitate access to finance for small, cottage and medium enterprises (CMSEs).

Bangladesh Bank said that the main goal of this initiative is to ensure sustainable economic growth and play a role in job creation by leveraging the opportunities of the Fourth Industrial Revolution. They consider digital banking as an important tool to facilitate credit flow, especially for the marginalized population.

Applicants will have to submit a fee of five lakh taka (non-refundable) along with the prescribed proposal. This money should be paid through bank draft or pay order from any scheduled bank in favor of Bangladesh Bank. If the conditions are not met, the application will be rejected.

In addition to submitting the application form directly, all documents must also be submitted via e-mail. Detailed instructions have been published on the Bangladesh Bank website.

The notice signed by Bangladesh Bank's Banking Regulation and Policy Department (BRPD) General Manager Md. Bayazid Sarkar said, "Bangladesh Bank believes that the global financial sector has changed due to continuous technological innovations. Considering the challenges of this change, the central bank is prioritizing to bring more efficiency in providing financial products and services and to create a wider range of financial systems."

Earlier, Bangladesh Bank had issued a policy on digital banks on June 14, 2023. According to that policy, the minimum paid-up capital for establishing a digital bank was Tk 125 crore. Recently, the central bank increased it to Tk 3 billion. Tk 5 billion is required to obtain a conventional bank license. Digital bank licenses will be issued under the Bank Companies Act, 1991. Payment services will be operated under the Bangladesh Payment and Settlement System Regulations, 2014.

According to the policy of Bangladesh Bank, there will be a head office to operate the digital bank. No establishment will be required for providing services. That is, this bank will not provide over-the-counter (OTC) services. The digital bank will not have its own branches or sub-branches, ATMs, CDMs or CRMs. All services will be app-based, on mobile phones or digital devices.