Digital banking system has brought good news for Bangladesh. The government has decided to launch digital banks to reduce the use of cash and make transactions easier to create a ‘cashless society’. ‘Nagad Limited’ has been given final license as the country’s first digital bank by adding it to the list of scheduled banks. Through this the banking system has entered the digital age. However, it is not yet known when the digital banking system will be commercially launched from the cash side.

Recently, Bangladesh Bank gave final approval to Nagad Limited. Before this initially LOI (Letter of Intent) is given in cash and ‘Kadi’.

Nagad’s head of media and communications, Muhammad Zahidul Islam, told Business Bangladesh that preparations for the launch of Nagad’s digital bank operations are in full swing. Now we are waiting for the official announcement. Regarding the future plans, he said, Cash will try to bring unbanked people into the banking system through digital bank. For him, cash digital bank will bring surprises in many things including loans at single digit interest, DPS at attractive profits.

5 companies have been approved in the first phase of digital banking system: mobile financial service provider Cash, ACI’s ‘Kadi’, a joint venture of several banks DigiTen, BRAC’s Udyog Bikash and Bank Asia’s Udyog Digital Bank Limited. Separate banking systems for digital transactions in the country’s banking sector received 52 applications on sole and joint partnership basis for license to provide digital bank services. After verifying them, Bangladesh Bank decided to approve these companies.

Bangladesh Bank Spokesperson Majbaul Haque said that Digi Ten Bank Ltd., BRAC’s Bikash Digital Bank and Bank Asia’s Digital Bank Ltd., operated through the merger of 10 banks, will not need to get digital bank licenses separately as they belong to the banking sector. Stating that these three companies will be able to provide digital banking services by opening a digital banking ‘wing’, he said that these three companies will be able to operate digital banks through a policy. Later they will be given final approval.

He said that 52 companies individually and jointly applied to get the bank within the extended period till August 17, 2023. These applications were scrutinized by three committees and initially nine companies were deemed eligible. Companies that have scored 60 out of 100 marks on various factors including business experience, feasibility, technology and security measures are shortlisted.

How to get services in digital banking: According to the policy, the digital bank will have a head office in Bangladesh. This office will be used as the office of the bank’s management and support staff. Besides, the work of receiving and settling customer complaints either physically or digitally will be done in this central office. But digital banks will not be able to provide transaction services to customers directly over the counter like conventional banks. This bank will not have its own branch, sub-branch, agent or window. Can’t even have its own ATM/CDM/CRM or tangible instruments. Digital bank customer account will be opened online by complying with KYC. They will not have any ATM booth of their own. After opening the account, the customer can transfer and use money online using any other bank or MAFS agent, ATM booth, CDM, CRM network. Money can be withdrawn from your account in the same manner. Digital banks can introduce virtual cards, QR codes or any other advanced technology-based products to facilitate transactions. This bank can give loans to any level of customers within the country, but the scope of foreign transactions will be limited. However, they will be able to receive remittances from abroad and operate FC accounts. This bank can act as a paying or paying bank on behalf of someone. Foreign currency transactions can be done on behalf of the customer subject to approval for education, treatment, travel or any other need abroad. However, foreign trade loans, large and medium industries cannot finance term loans.

This bank can give loans to customers of any level within the country. The policy calls for giving priority to lending to marginal and SME sectors.

Business Bangladesh / AK