KARACHI: An overwhelming interest by local and international players in the State Bank of Pakistan’s (SBP) digital bank initiative reflects their confidence in the country’s financial sector which has been making huge profits despite the Covid-19 pandemic and other economic problems.

The SBP on Wednesday said it had concluded the process of receiving applications for issuance of licences for digital banks as per its announced deadline of March 31.

“The application process registered an overwhelming response whereby the SBP received 20 applications from a diverse range of applicants, including domestic commercial banks, microfinance banks, electronic money institutions and fintech players,” said the SBP.

Local, foreign players show strong interest

Foreign players already operating in the digital banking space overseas have also expressed their interest in the Pakistani market.

“The strong interest shown by both local and international players in SBP’s digital banks’ initiative reflects their confidence in the financial sector and the potential of the investment opportunities available in the country,” said the SBP. Earlier this year on Jan 3, the SBP launched its “Licencing and Regulatory Framework for Digital Banks”.

While setting the foundation for the customers’ convenience, providing cost-effective digital financial services and promoting innovation for achieving SBP’s overall goal of banking digitisation, the framework is primarily aimed at providing financial services to unserved and underserved segments of society, it added.

To achieve the intended objectives under this regulatory initiative, the applications were solicited from interested applicants who can demonstrate a strong value proposition, the robustness of technological infrastructure, the sufficiency of financial strength, a high level of technical expertise and effectiveness of their risk management culture in the Digital Banks’ space, said the SBP.

The SBP said it has developed and finalised this framework after an extensive consultative process. Initially, the SBP released an exposure draft of this framework and a targeted survey was launched to invite feedback from a wide range of local as well as international stakeholders.

Subsequently, several meetings were held with all the stakeholders to further enrich the consultative exercise.

Published in Dawn, April 7th, 2022