Pakistan’s central bank has received 20 applications for digital banking licenses under its licensing and regulatory framework for digital banks.

The State Bank of Pakistan (SBP) launched the framework in January this year as part of its efforts to digitise the country’s banking and payments services industry.

Its primary aim is to provide financial services to unserved and underserved segments of society.

The central bank said: “The application process registered an overwhelming response whereby SBP received twenty (20) applications from a diverse range of applicants, including domestic commercial banks, microfinance banks, electronic money institutions and FinTech players.

“Foreign players already operating in the digital banking space overseas have also expressed their interest to venture into the Pakistani market.”

To achieve the objective of the framework, the SBP sought applications from those who have sufficient financial strength, offer a strong value proposition, have robust technological infrastructure and expertise along with the ability to manage risks posed by the digital banking space.

As per the initial announcement, SBP plans to offer two types of licenses — Digital Retail Bank (DRB) and Digital Full Bank (DFB) — under this framework.

The DRB authorisation will be focused on retail customers, while DFB license holders can offer services to retail as well as business and corporate customers. 

Initially, SBP plans to issue up to five digital banking licenses.