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Banglalink, Bangladesh's third largest telecom operator in terms of subscriber base, and its parent company, VEON Ltd, have submitted an application for a digital banking licence.
The group is aiming to accelerate Banglalink's foray into the fintech sector by securing a digital banking licence. The move will enhance the operator's services by integrating digital financial solutions, using VEON's expertise in the field, Banglalink said in a statement on Thursday.
“Bangladesh is a country of 173 million people where banking service penetration is still very low. Digitalisation will unlock enormous opportunities for the people of Bangladesh, in line with the government’s Smart Bangladesh strategy and growth ambition," said Erik Aas, CEO of Banglalink.
Banglalink's aspirations in the realm of digital banking highlight VEON's commitment to digital empowerment, according to the group's CEO Kaan Terzioğlu.
"We have the expertise and the scale to support Banglalink in its drive for innovation, financial inclusion, and digital transformation in Bangladesh. With this important step into financial services, we look forward to support Bangladesh’s growth ambition, building on the great work that the Banglalink team has been doing in transforming people’s lives with their digital services."
Banglalink is currently providing services to more than 42 million subscribers in Bangladesh. The operator's app MyBL caters to a monthly active user base of 7.1 million customers, reports bdnews24.com.
Bangladesh announced plans to launch a digital bank in the current fiscal year as part of an effort to ‘broaden and accelerate financial inclusion’.
Ten private banks have since taken the initiative to form a consortium in a bid to launch a digital bank.
Bangladesh Bank has imposed a requirement of Tk 1.25 billion as paid-up capital to ensure that only financially stable companies can acquire a digital banking licence. Moreover, the central bank has said that loan defaulters will be excluded from the initiative.
In Bangladesh, the mobile financial service network is operated by over 1.1 million agents and processes an average of more than 10 million transactions, totalling around Tk 22.95 billion, each day.
The digital banking initiative aims to further boost the volume and value of transactions conducted through these platforms.
With a range of services planned, including convenient bill payments for electricity, gas, water, student fees, service charges, and government fees, the digital banking initiative aims to provide faster and more affordable options for customers compared to traditional payment methods.