KARACHI: Mashreq, a Middle East–based financial institution that’s going to set up a local digital bank, announced on Monday its incorporation in Pakistan.

A press release said it’ll soon start digital banking operations as part of its commitment to driving digitisation and financial inclusion in high-growth markets like Pakistan.

“Our foray into Pakistan is a pivotal moment for Mashreq… We are committed to playing a vital role in the country’s digitisation efforts and financial development, particularly in the sectors of SME, payments and inclusion. The bank’s tech-ready infrastructure, coupled with its digital DNA, will be leveraged to empower customers in the market, meet their evolving needs, deliver seamless banking experiences and support the country’s vision of a financially inclusive, digitally-led economy,” said Fernando Morillo, group head of retail banking at Mashreq.

The State Bank of Pakistan (SBP) issued no-objection certificates in January to five of 20-odd applicants for establishing digital banks. The new entities will operate digitally without any network of brick-and-mortar branches.

Even though digital payments are on the rise, the economy is still dominated by cash. A recent financial inclusion survey by not-for-profit Karandaaz showed 81 per cent of Pakistani adults didn’t have bank accounts in 2022.

The main reason for not having a bank account was “do not need one and have never thought of using one,” as reported by 68pc of those without a bank account.

Published in Dawn, August 22nd, 2023