The State Bank of Pakistan (SBP) recently furnished five commercial banks with in-principle approval to set up digital banking platforms. Three of the five – HugoBank, KT Bank Pakistan and Raqami Islamic Digital Bank – have been established this year while the others – Mashreq Bank Pakistan and Telenor Microfinance Bank – have longer track records. These banks can now offer digital financial services on a limited basis, before final rollouts are approved by SBP. The process is based on SBP’s 2022 “Licensing and Regulatory Framework“ for the promotion of digital banks. Among the goals of the effort is to create “a faster, cheaper and an efficient solution for meeting financial needs of the unserved and underserved segments of the society…enhancing market efficiencies [and] providing access to a wider range of financial services…”.
Established in 1948, SBP is the central bank of Pakistan and has three subsidiaries: (1) SBP-Banking Services Corporation; (2) the National Institute of Banking and Finance; and (3) the Deposit Protection Corporation. The bank’s main functions include managing liquidity, exchange rates, and balance of payments and external reserves as well as promoting overall economic development.
By Hawra Moochhala, Research Associate
Sources and Additional Resources
Business Recorder article
https://www.brecorder.com/news/40264192
SBP press release
https://www.sbp.org.pk/press/2023/Pr-20-Sep-2023.pdf
Mashreq Bank homepage
https://www.mashreqbank.com
Telenor Microfinance homepage
https://telenorbank.pk/
LinkedIn profile on HugoBank
https://www.linkedin.com/company/hugobank/?originalSubdomain=pk
LinkedIn profile on Raqami Islamic Bank
https://www.linkedin.com/company/raqamibank/?originalSubdomain=pk
SBP homepage
https://www.sbp.org.pk
Previous MicroCapital article on SBP
https://www.microcapital.org/microcapital-brief-sbp-increases-transaction-limits-bolsters-alternate-channels-to-boost-branchless-banking-in-pakistan/
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