KARACHI: The Licensing and Regulatory Framework for Digital Banks is another milestone with regard to digital transformation and a major step towards revolutionising the banking services industry, State Bank of Pakistan (SBP) Governor Dr Reza Baqir said on Friday.
The SBP announced that it would grant up to five licences for digital banks. The central bank said it intended to bring digital banks with a strong value proposition, robust technological infrastructure, sufficient financial strength, technical expertise and effective risk management culture.
The SBP assured the market participants and potential investors that a team will remain available to provide necessary guidance in this regard.
The SBP issued “Licensing and Regulatory Framework for Digital Banks” on Jan 3. To create awareness of this important development in regulatory ambit, the SBP organised a webinar titled ‘Digital Banks — A New Era in Banking’. The objective of the webinar was primarily to create awareness about the next generation of banks, i.e. digital banks and the potential they offer for financial inclusion in the country. It was also aimed at sharing the details of the digital banking framework amongst the market participants and prospective investors and addressing their queries.
In his keynote address, Dr Baqir highlighted the potential of digital financial services to become ubiquitous in the banking industry and its significance in terms of inclusion and innovation.
He emphasised SBP’s expectations from digital banks in promoting financial inclusion by providing affordable financial services to unserved and underserved segments of society, alongside fostering a new set of customer experiences.
Dr Baqir pointed out that digitisation of financial services is picking up pace and is transforming the way banking is done for both individuals and businesses.
Pakistan’s journey for digital financial services started in the early 2000s, and since then, a number of enabling regulatory initiatives were launched, notably, Branchless Banking Regulatory Framework, Electronic Money Institutions Regulations, Roshan Digital Account, RAAST, Customers’ Digital Onboarding Framework, and Asaan Mobile Accounts.