The Bangladesh Bank on Monday approved a banking licence for Nagad Digital Bank PLC, the first full-fledged digital bank in Bangladesh, and listed it as a scheduled bank.
Bangladesh Bank director Mohammad Shahriar Siddiqui handed over the copy of the licence to Nagad founder and chief executive officer Tanvir A Mishuk at the office of the central bank in Dhaka on Monday.
The central bank also issued a circular to this effect on the same day.
The circular stated, 鈥楴agad Digital Bank PLC has been listed as a scheduled bank from Monday by Bangladesh Bank under the authority of provision 37(2)(a) in the Bangladesh Bank Order, 1972.鈥�
A digital bank, also known as an online bank, is a financial institution that operates primarily or exclusively through digital channels, such as websites and mobile apps, rather than through physical branches.
聽Digital banks are popular for their flexibility, lower fees, and the convenience of managing finances from anywhere at any time.
However, the central bank, in a separate notification, provided an exemption from provision 14(ka) of the Bank Company Act, 1991 (amended in 2023) regarding the holding of a substantial volume of shares in a bank by any person or entity.
The rules state, 鈥楴o individual, institution, company, or members of the same family shall be allowed to concentrate ownership of a bank鈥檚 shares. Furthermore, no individual, institution, company, or family members shall directly or indirectly, individually or jointly with others, purchase more than 10 per cent of the shares of any bank.鈥�
The notification clarified that this provision of the Bank Company Act, 1991 would not apply to Blue Heaven Ventures LLC, Orisis Capital Partners LLC, and Finclusion Ventures Pte Ltd.
The Bangladesh Bank granted the waiver under the power of provision 121 of the Bank Company Act, 1991, which allows the central bank to exempt any provision of the act after consulting with the government and publishing a government gazette notification.
On October 22, 2023, Nagad Digital Bank and Kori Digital received letters of intent from the Bangladesh Bank to launch full-fledged digital banks.
However, Kori Digital Bank failed to be ready for full-fledged operations and so had yet to get the licence.
The central bank, at a board meeting on the same day, decided in principle to extend digital banking licences to eight firms.
The six other entities are Bkash Digital Bank, Digi-10, DigiAll, Smart Digital Bank, Japan-Bangla Digital Bank, and North East Digital Bank.
