Bangladesh Bank Clears Five Digital Banks to Start Building Toward Launch

Five Names, One Bet on Branchless Banking

Bangladesh Bank's board handed out letters of intent to five aspiring digital banks on September 24, picking winners from a field of 14 applicants that had been waiting since a second licensing round closed last November. The five are bKash Digital Bank, backed by the shareholders of the country's dominant mobile financial service; Boost Digital Bank, promoted by Robi Axiata; Nova Digital Bank, backed by Banglalink's parent VEON together with Square Group; DK Digital Bank, an arm of Bhutan's DK Bank making its first move into a foreign market; and Kori Digital Bank, led by Technohaven chief executive Habibullah N Karim, whose application had been sitting in limbo since it first won conditional approval under the previous Awami League government.

A letter of intent is not a banking licence. It is closer to a conditional offer, telling each applicant it may now spend money building the technology, hiring compliance staff and proving to regulators that it can operate safely, before Bangladesh Bank decides whether to issue a final licence. "Five institutions have been given initial licences for digital banks," central bank spokesperson Arief Hossain Khan said. "Final licences will be issued once all conditions are fulfilled." Nobody at the central bank has offered a date for that next step, and the sector's recent history suggests patience is warranted.

A Three Year Wait, With One Scandal in the Middle

Bangladesh Bank first opened applications for digital banking licences in October 2023, when 52 companies applied and only two, Kori and Nagad, received letters of intent. Nagad went on to secure a final licence under the old government, a decision that later drew scrutiny once political power changed hands, and Kori's approval was effectively frozen while regulators reworked the rules. A second application window closed on November 2, 2025, drawing 12 more applicants ranging from telecom operators to commercial banks and business conglomerates. An attempt to push through approvals in mid February this year collapsed after central bank officers protested the process, and it has taken until now for the board to settle on a shortlist of five.

Along the way, the entry bar has risen sharply. Bangladesh Bank revised its digital banking guidelines in August 2025 to lift the minimum paid up capital requirement to Tk300 crore, more than double the Tk125 crore threshold that applied when the first licensing round opened. Regulators have framed the increase as a way to weed out undercapitalised players in a business where the appeal, no physical branches and lower fixed costs, could otherwise tempt firms into competing recklessly on price. It also means several of the newly favoured applicants are backed by telecom operators or existing financial platforms with the balance sheets to clear that bar comfortably, while smaller, purely fintech contenders have had a harder time making the cut.

What a Digital Bank Can and Cannot Do

Bangladesh Bank has been explicit that these institutions are not meant to compete with conventional banks for large corporate lending. "Digital banks would focus on smaller borrowers and would not be allowed to provide large loans," Khan said, describing a model built around small deposits, microloans and everyday transactions conducted entirely through a mobile app rather than a branch counter. That framing matters because it is the same underserved segment, small businesses, gig workers, rural households, that Bangladesh's mobile financial service industry has spent more than a decade trying to reach with mixed success. bKash and Nagad between them already carry tens of millions of active users, and a digital bank licence would let a bKash affiliated entity offer interest bearing deposits and formal credit products it could not legally provide as a mobile wallet operator.

Ahsan H Mansur, a former Bangladesh Bank governor, has argued publicly that the entire point of the digital banking push should be measured against that yardstick: how many previously unbanked or underbanked Bangladeshis, particularly small and medium enterprise owners, actually gain access to formal credit as a result. Bangladesh's banking sector has struggled for years to extend affordable financing to smaller firms, which often cannot produce the collateral or the paperwork conventional lenders demand, and digital banks are being pitched as a way to use transaction data and mobile footprints as a substitute for a conventional credit history.

The Skeptics Are Watching the Fine Print

Even boosters of digital banking concede the model is unproven at scale in Bangladesh. A branchless bank still needs the same anti money laundering controls, deposit insurance participation and cybersecurity infrastructure as any conventional lender, and building all of that from scratch is expensive, which is part of why regulators raised the capital bar in the first place. There is also the awkward precedent of Nagad, whose fast tracked final licence under the last government became a point of controversy once oversight of that approval came under review, a reminder that speed and caution can pull in opposite directions in this sector. For now, the five letters of intent represent a start, not a finish line, and the real test of whether Bangladesh's digital banking experiment works will not arrive until at least one of these five actually opens its doors to depositors.

Why Telecom Money Keeps Showing Up in This List

It is not a coincidence that three of the five approved applicants, bKash, Boost and Nova, trace back to Bangladesh's mobile network operators or their affiliated fintech arms. Telecom companies already sit on enormous customer data sets built from prepaid recharges, mobile data usage and, in bKash's case, years of wallet transaction history, all of which can be repurposed into the kind of alternative credit scoring that digital banks are counting on to reach borrowers with no formal financial footprint. Robi's backing of Boost and Banglalink parent VEON's involvement in Nova effectively extend a race that mobile financial services already ran a decade ago, when telecom linked wallets outpaced bank issued alternatives largely because they had a distribution network, the phone itself, that traditional banks lacked. Whether that same advantage translates into deposit taking and lending, a far more regulated business than running a mobile wallet, is the open question this next phase of the licensing process is meant to test.

Bangladesh is a comparative latecomer to fully licensed digital banking even within South Asia, where India and Pakistan have experimented with narrower digital banking frameworks for several years with uneven results. Regulators here have leaned toward caution partly because of the country's own history with mobile financial services, which grew fast but also drew persistent concerns about agent fraud, weak cybersecurity at smaller providers and gaps in consumer protection that took years to close. The Tk300 crore capital floor, the insistence that digital banks stick to smaller borrowers, and the slow, multi year path from application to letter of intent to final licence all read as an attempt to avoid repeating those growing pains at a larger scale, even if it means Bangladesh's digital banking sector arrives years after the technology to build one has been ready.

Digital bank	Key backer	Status before this approval
bKash Digital Bank	bKash shareholders	New applicant, second window
Boost Digital Bank	Robi Axiata	New applicant, second window
Nova Digital Bank	VEON (Banglalink) and Square Group	New applicant, second window
DK Digital Bank	DK Bank, Bhutan	New applicant, second window
Kori Digital Bank	Habibullah N Karim / Technohaven	Held over from first window, 2023

Minimum paid up capital for a new digital bank now stands at Tk300 crore, up from Tk125 crore when the first licensing round began in 2023.