KARACHI: The State Bank of Pakistan (SBP) on Friday issued no-objection-certificates (NOCs) to five applicants — Easy Paisa DB, Hugo Bank, KT Bank, Mashreq Bank, and Raqami — for establishing digital banks.

In January last year, the SBP introduced a Licensing and Regulatory Framework for Digital Banks in line with international best practices.

The framework was the first step towards introducing full-fledged digital banks which are expected to provide all the banking services through digital means without any need for their customers to visit the branches physically.

In response to SBP’s Licensing and Regulatory Framework for digital banks, 20 applications were received from a diverse range of interested players such as commercial banks, microfinance banks, electronic money institutions and fintechs by March 31, 2022.

Further, a number of foreign players including venture capital firms already operating in the digital banking space also expressed their interest to venture into the Pakistani market directly or in collaboration with local partners.

The five applicants were selected after a thorough and rigorous assessment process as per the requirements of the framework.

Applicants were assessed on various parameters that included fitness and propriety, experience and financial strength; business plan; implementation plan; funding and capital plan; IT and cybersecurity strategy and outsourcing arrangements, etc.

Further, all the applicants were given the opportunity to present their business case to SBP.

Published in Dawn, January 14th, 2023