September 20, 2023 (MLN): In a bid to foster innovation, financial inclusion and availability of affordable digital financial services, State Bank of Pakistan (SBP) has granted In-Principle Approval (IPA) for establishing five digital retails banks, said a press release issued today.
The banks include HugoBank Limited, KT Bank Pakistan Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited and Telenor Microfinance Bank Limited.
This momentous decision follows SBP's issuance of No Objection Certificates (NOCs) to these five successful applicants back in January 2023, signaling the regulator's commitment to driving digital banking innovation in Pakistan.
During the official ceremony, Governor SBP, Mr. Jameel Ahmad awarded the IPAs to these five digital banking pioneers, emphasizing the historic significance of this event.
In his keynote address, he underscored the profound benefits that Digital Retail Banks (DRBs) bring to the financial system and acknowledged the challenges they face in this dynamic sector.
Mr. Jameel also shed light on other vital regulatory initiatives aimed at nurturing a robust digital financial ecosystem and reassured all stakeholders of SBP's unwavering dedication to forging a bright, innovative, and digitally empowered future for banking in Pakistan.
The governor firmly conveyed SBP's commitment to enhancing financial inclusivity, fostering innovation, and ensuring responsiveness to the needs of Pakistan's citizens.
He articulated his optimism that these digital banks, once operational, would play a pivotal role in shaping a thriving digital ecosystem, revolutionizing the customer experience, and providing affordable digital financial services, including credit access, to underserved segments of society.
Dr. Inayat Hussain, Deputy Governor of the State Bank of Pakistan also highlighted the critical role of these IPAs in enabling the proposed DRBs to advance their operational readiness across all facets, from governance and risk management to capital requirements, compliance, audit, consumer protection, business continuity, cyber security, product development, technological infrastructure deployment, and the formulation of relevant policies, processes, and procedures.
It is worth noting that earlier this year, SBP issued a "No Objection Certificate (NOC)" to these DRBs, allowing them to incorporate as Public Limited Companies with the Securities and Exchange Commission of Pakistan (SECP).
These institutions were selected after a thorough and rigorous evaluation process based on a comprehensive set of parameters including fitness and propriety, experience and financial strength; business plan; implementation plan; funding and capital plan; IT and cybersecurity strategy and outsourcing arrangements.
As these institutions work toward operational readiness, they will require SBP's final approval to commence their operations.
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Posted on: 2023-09-20T18:34:23+05:00