Karachi: The State Bank of Pakistan (SBP) on Monday approved Pakistan’s first branchless banking Licensing & Regulatory Framework, news sources reported. Under the newly formulated framework, initially, five licenses will be awarded to banks with strong technology acquisition and applications will be accepted till March 31, 2022.
As per the SBP circular, the framework will allow banks to develop technologies and regulations for wholly digital banks that will provide all the banking services; from account opening to deposit and lending, through digital means and the customers will not need to visit any branch physically. Under the licensing two types of digital banks will be opened that includes the Digital Retail Bank (DRB) for retail customers and Digital Full Bank (DFB) for retail and business customers. The licenses will also be offered in the Islamic and conventional banking sectors as well with entities able to obtain both. The initial capital cap for the banks to obtain licenses will be PKR 1.5 billion, which will gradually increase to PKR 4 billion over the coming period.
It was reported that the framework includes guidance regarding licensing requirements, potential sponsors and permissible use-cases during different phases. It also sets an expectation from applicants to have sound digital governance, robust, secure and resilient technology infrastructure, effective data management strategy and practices. Similarly, for regulatory purposes, the digital banks will still have to maintain staff and physical presence in the country.
Nauman Ahmad is an imaginative Pisces whose love for literature and nature is unparalleled. When he's not reading or hiking, he's sleeping and eating, which gives him plenty of energy for his next adventure.
