Bangladesh Bank Clears Five Digital Banks for Launch
The central bank has given the green light to five new digital banks, including bKash, Robi, and Nova, a move that could bring millions of unbanked citizens into formal banking for the first time.
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In a Nutshell:
- Bangladesh Bank has granted initial approval to five digital banks in its second licensing round, with bKash, Robi, and Nova among the approved names.
- The shortlist reportedly includes bKash Digital Bank, Robi's Boost, VEON-backed Nova Digital Bank, Akij's Munafa Islami Digital Bank, and a Bank Asia-led consortium.
- These digital banks will run entirely through mobile apps, with no branches, sub-branches, or ATMs of their own.
- This follows a first round in 2023 when eight companies, including Nagad and Kori, got initial approval, though Nagad's licence has reportedly been suspended since mid-2024.
- Bangladesh Bank raised the minimum paid-up capital requirement for digital banks to Tk 300 crore and tightened its "fit and proper" screening ahead of this second round.
Context
Bangladesh has been pushing toward branchless, app-based banking as part of its "Smart Bangladesh 2041" vision, and mobile financial services such as bKash, Nagad, and Rocket already process payments for millions of users. But sending money is different from full banking; saving, borrowing, and getting loans through an app is the next step, and that's exactly what these new digital bank licences allow. Twelve companies applied for this second round, and the central bank has now narrowed that list down after a lengthy evaluation.
Why it matters
Roughly 60 million adult Bangladeshis still have no bank account, and about 47% of the population remains unbanked, one of the largest such populations in the world. Traditional banks have avoided rural and remote areas because branches are too costly to maintain, so digital banks are designed to fill that gap, using just a smartphone. Analysts believe fully realising digital financial inclusion could push GDP growth into double digits, generate around 3 million new jobs, and cut poverty from 18.7% to 15.8%, while also narrowing Bangladesh's roughly USD 2.8 billion MSME financing gap. At the same time, Nagad's suspended licence is a reminder that approval doesn't guarantee a smooth rollout, since capital adequacy and governance issues can still derail a digital bank after launch.
What we think
Digital banks offer life-changing financial access for millions in rural and underserved areas. However, their lack of physical branches means they must closely monitor their security, data privacy, and customer service. Nagad's stalled progress since 2023 proves that a license alone does not guarantee a trustworthy platform. As telecom giants enter this space, regulators must enforce strict rules to prevent conflicts of interest.