Bangladesh Bank approves digital banking letters of intent for four entities

The Bangladesh Bank board has approved the issuance of letters of intent (LOIs) to four entities to establish digital banks in the country. This move facilitates a branchless banking model where services such as lending and deposit-taking are conducted entirely through digital platforms.

The selected entities include bKash Digital Bank, Boost Digital Bank (sponsored by Axiata Limited), Nova Digital Bank (a joint venture between VEON and Square Group), and Bhutan’s DK Digital Bank. Additionally, the central bank decided to issue an LOI to Kori Digital Bank, which had previously received initial approval.

Under the current regulatory framework, LOI holders must fulfill specific conditions and meet stricter capital requirements before receiving final operating licenses. For instance, Kori Digital Bank is required to increase its paid-up capital from Tk200 crore to Tk400 crore. This development allows mobile financial service providers, telecommunications-linked companies, and technology ventures to enter the formal banking sector.