Unique Hotel to invest Tk 125m in digital bank

Another publicly traded company, Unique Hotel & Resorts PLC, has decided to become a sponsor shareholder of a proposed digital bank named 'AMAR Digi Bank PLC'.

In a board meeting held on Thursday, the owner of The Westin Dhaka, has decided to invest Tk 125 million in the proposed digital bank, along with other sponsors.

The investment amount is 10 per cent of the total paid-up capital of the digital bank, the company said in a price-sensitive information filing.

The company said the proposed digital bank's authorised capital is Tk 2.50 billion while the paid-up capital is Tk 1.25 billion.

The investment will be done subject to approval from regulatory authorities, said the company.

Meanwhile, more than 10 listed banks and three firms have already shared their plans to invest in digital banks in a move to provide digital services or cashless transactions to their clients.

Ten listed private banks have already formed a consortium to set up a digital bank -- Digi10 Bank PLC -- while Bank Asia and Brac Bank have also shared their decisions to become sponsors for two other digital banks to meet the demands of tech-savvy customers.

ACI, one of the leading conglomerates in Bangladesh, decided to invest Tk 100 million in digital banks, while Crystal Insurance and Pragati Life Insurance also decided to invest Tk 125 million each in digital banks.

The Bangladesh Bank invited applications for proposals to form digital banks on June 21. The deadline was initially set at August 1 this year. But, it was later extended to August 17 to give entrepreneurs more time to prepare detailed applications with the necessary documents.

As per the guidelines, a digital bank will have a minimum paid-up capital of Tk 1.25 billion. The capital will come from sponsors.

Sponsors' shares cannot be transferred within five years from the commencement of the business, without prior permission from the Bangladesh Bank.

The guidelines are aimed at inspiring fintech companies, tech firms, microfinance institutions, mobile financial service providers, banks, and financial institutions to come up with joint ventures for setting up digital banks.

A digital bank must go for an initial public offering (IPO) within five years from the date of getting the licence from the central bank, according to the guidelines.

Digital banks will not be allowed to carry out transactions in foreign currencies or engage in trade finance. It will, however, be allowed to collect wage earners' remittances.

It may issue virtual cards, QR codes, and other advanced technology-based products to facilitate transactions.

Listed in 2012, Unique Hotel witnessed its revenue surge 105 per cent year-on-year to Tk 2.19 billion in nine months till March 2023, while its net profit jumped 70 per cent to Tk 1.64 billion.

The company's earnings increased due mainly to its gain from the sale of ordinary shares in the subsidiary company -- Unique Meghnaghat Power Ltd, the company said in its financial statement.

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