Tell me more: As part of the framework, the SBP will grant up to five licenses to digital banks with the following characteristics:
- strong value proposition
- robust technological infrastructure
- sufficient financial strength
- technical expertise
- effective risk management culture.
Dr. Raza Baqir, Governor of SBP, delivered a keynote address at the event.
What he said: Digital financial services can take over the banking industry. And SBP’s goal for the financial sector is to promote:
He further added that SBP expects digital banks to promote financial inclusion by providing affordable financial services to unserved and underrepresented segments of society.
Dr. Baqir pointed out how the digitization of financial services was making headway, and it is transforming the way banking is done for both individuals and businesses.
He mentioned that since the beginning of Pakistan’s journey for digital financial services in 2001, several enabling regulatory initiatives had been launched, including:
- Branchless Banking Regulatory Framework
- Electronic Money Institutions Regulations (EMI)
- Roshan Digital Account (RDA)
- Asaan Mobile Accounts AMA
- Customers’ Digital Onboarding Framework
He said the Licensing and Regulatory Framework for Digital Banks could change the banking business.
Also, there was a panel discussion where the benefits and reasons for existing banks and microfinance banks to apply for digital banks’ licenses were discussed.
The webinar was attended by prominent banking community members, fintech, business fraternity, and government agencies.
Big Picture: State Bank is pushing for the digitization of the banking sector. The pandemic has also led to more and more people using digital payment methods.
Many SBP initiatives have come out recently, like RAAST, RDA, Asaan Accounts, etc. In a few years, digital banking could become the norm in the country, thanks to the SBP and the fintech world.