Twenty banks in a race to win digital banking license in Pakistan: SBP

Karachi, June 22, 2022: State Bank of Pakistan (SBP) has so far received 20 applications for digital banking against the announced five licenses to be awarded soon to the successful institutions, as banks are at the crux of second digital revolution in the country.

“Due diligence (of banks and financial institutions applied for digital banking license) is underway and we will be hopefully issuing licenses pretty soon,” said Syed Irfan Ali, who is Managing Director of SBP subsidiary Deposit Protection Corporation (DPC).

The central bank has decided to issue only five licenses in the beginning to kick-start the journey in digital banking, he said while speaking at the 15th international conference on ‘Mobile Commerce 2022’ organized by Total Communications in Karachi on Wednesday.

The financial institutions, who have applied for digital banking license, are including top five banks operating in the country.

“20 digital banking applications…where do we end?” Ali questioned and answered in the same breath “There is no end. This is just the beginning (of digital baking in Pakistan).”

“May be the QR code, thumb impression or hands in the air (to conduct financial transactions) may be the next level of future banking,” he said.

He hoped the forthcoming digital banks may offer banking services to unbanked people and business in remote areas including in Balochistan, Khyber Pakhtunkhwa, bordering areas, Thatta, Thar, Cholistan, Gilgit, Hunza, Skardu. “They are not out of Pakistan, but party of the country,” he said while adding bankers at the conference.

Former Prime Minister Imran Khan wanted to connect non-resident Pakistanis with banks operating in the country. “So, SBP, (the then) governor Reza Baqir, I (Ali himself) and the team, we embarked on a journey of digitization and we said that we can get to non-resident Pakistanis (through Roshan Digital Account / RDA) and we will make life easier for them.”

Accordingly, RDA inflows crossed $4.5 billion mark with a record one-day inflows of $57 million yesterday (Tuesday, June 21), he said.

Ali claimed it was Pakistani which first formed rules and regulations for branchless banking at world and acquired a fantastic result of that.

“Branchless banking was…something out of box. That was the first time that we came out with regulations, no one has such regulations in the world (at that time).”

Shazad G. Dada, President and CEO, UBL Bank said in his video message that Pakistan is about to embark second digital revolution in the banking sector ahead the award of digital banking licenses.

“Pakistan is at the crux of second digital revolution…amid a lot of happening in the domestic economy,” he said.

Banks, telecom and technology firms have formed a fantastic collaboration under the first digital revolution in Pakistan.

Omar El Gammal, SVP Global Business Development, Paymob, Egypt, announced that Paymob has entered into Pakistani market to primary provide online and digital banking services to SME sector.

The Egyptian digital payment company “would deploy 100,000 merchants over the next two years in Pakistan,” he said.

Qasif Shahid, Cofounder & CEO, Finja said PWC has placed Pakistan’s economy among top 32 countries around the world by 2030.

Other speakers said digital banking may appear challenging. At the same time, major benefits of the banking would be including accelerating drive for financial inclusion, reduction in banking cost and getting rid of paper-based banking.

The one-day conference was also featured four panel discussions including (1) Digital Banks: The Dawn of a New Era? (2) Digital Lending: Insights from Actual Practice, and (3) How is Fintech Disrupting Commerce. 4) Islamic and Digital Finance.

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