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Digital Banks to be soon launched by State Bank of Pakistan

Digital Banks to be soon launched by State Bank of Pakistan

Branchless banking will gain recognition in Pakistan with the opening of all-digital banks

State Bank of Pakistan (SBP) is currently working on the mechanism to launch digital banking services in Pakistan.

According to the Executive Director of SBP, Syed Irfan Ali, the new category of banking services will provide more people with access to banking services.

“Move will help achieving the maximum target of financial inclusion, Digital bank incorporates new and developing technologies throughout a financial services entity, in concert with associated changes in internal and external relationships, to provide enhanced customer services and experiences effectively and efficiently”, Syed Irfan Ali added.

Once allowed, Banks will be allowed to operate through internet only, i.e. they will be allowed to on-board customers through internet — without having any physical presence — while customers will be allowed to do all sorts of financial transactions while staying online through websites or mobile apps.

At the moment, Standard Chartered Bank and United Bank Limited have separately introduced concept of digital bank two branches in Karachi. In near further, these digital branches will further expanded towards other part of the country.

Syed Irfan Ali further stated, “SBP is working on development of a concept paper on Digital Banks. This concept paper would include the international experiences of Digital Banks, regulatory framework available, best international practices etc.”

The regulatory framework would ideally encompass following areas among including,

  • The minimum amount of capital a bank would need to run the digital banking services.
  • Entry requirements for the establishment of a digital bank.
  • The criteria of on-boarding customers among other regulations.

Pakistan’s Internet Server Providers have noticed a drastic rise in owing to the availability of fast internet 3G and 4G services in across the country. In result, most citizens are demanding the availability of mobile banking.

The inclusion of digital banks will further enhance the penetration of branchless banking which is quickly catching up.

About Sayyar Gul

Sayyar Gul is doing his MS Computational Sciences & Engineering from National University of Science and Technology. He is technology enthusiast with keen interest in new technological developments from around the world.
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