Bangladesh Bank raises paid-up capital requirement for digital banks to Tk 3b

Bangladesh Bank has fixed the minimum paid-up capital for digital banks at Tk 3 billion, more than double the Tk 1.25 billion requirement outlined in its June 2023 guidelines.

The central bank issued a circular on Thursday to managing directors and chief executives of all scheduled banks, notifying them of the revised requirement.

Senior officials said Bangladesh Bank is preparing to invite new applications for digital bank licences, with the matter set to be discussed at the board meeting on Aug 27, reports bdnews24.com.

Further amendments to the existing guidelines are also being considered.

Central bank spokesperson Arief Hossain Khan said, “Work is underway on this. Revisions are being made to the digital banking guidelines, though I do not know exactly which points are being changed.”

Currently, entrepreneurs seeking a conventional bank licence must hold at least Tk 5 billion in capital. Paid-up capital refers to the portion of a company’s issued share capital that shareholders have fully paid.

Bangladesh Bank first paved the way for digital banks in June 2023, approving guidelines that set the capital threshold at Tk 1.25 billion. That year, it invited applications and received 52, later shortlisting nine for board review.

In August 2023, letters of intent were issued to Nagad Digital Bank PLC and Kori Digital Bank PLC. But following the political shift in August last year, allegations emerged that some of these ventures had been set up abroad with laundered money. As a result, Bangladesh Bank suspended Nagad’s licence and has yet to issue one to Kori.