Cheap paid-up capital requirement and low threshold enticed investors from different sectors including banks, insurance, telecom, and mobile financial service providers to join in the race to establish Digital Bank.
A total of 52 domestic and foreign entities have filed applications for licences to set up digital banks and the majority of conventional banks are on the list. Now, the topic of how a digital bank can vary from a regular bank and why conventional banks are competing for a license as digital banks has been posed.
Mashrur Arefin, Managing Director and CEO of City Bank and Vice Chairman of the Association of Bankers, Bangladesh (ABB), discussed the novel idea of a digital bank with The Business Standard in an interview. He addressed the distinction between traditional banking and digital banking explaining why a conventional bank can never turn into a “digital bank.”
How do you see the mad rush for a Digital bank license?
I think the mad rush has been caused by four factors. One is the low initial paid-up capital requirement, which is only Tk125 crore, and the low threshold of Tk50 lakh for individuals to become sponsors.
Secondly, we are a nation of truly…
