Digital Bank Licences Are Coming Soon, Bangladesh Says, After Years of Delay

Bangladesh's government is once again promising to open the door to digital only banks, an initiative that has now spent nearly three years stuck between regulatory approval and an actual working product. Speaking at a dialogue on September 19, Finance Minister Amir Khosru Mahmud Chowdhury said digital banking is going to happen very soon, adding that he had no doubt the initiative would proceed because it is part of the government's broader digital economy and financial inclusion goals.

The minister was careful to frame the rollout as gradual rather than immediate, stressing that any launch needs to account for cybersecurity, digital infrastructure and credit information integration, and that digital banking cannot function as an isolated service but has to sit within a wider ecosystem that includes internet connectivity and access to formal banking. It was a notably cautious tone for an initiative that has already burned through one failed attempt at a fast rollout.

A License Granted in 2023, a Bank That Never Opened

Bangladesh Bank's board first approved full digital banking licences for two entities, Nagad Digital Bank and Kori Digital, backed by conglomerate ACI, back on October 22, 2023. The decision came after the central bank narrowed a field of 52 applicants down to nine finalists, ultimately granting two full licences and three so called digital banking window approvals to bKash Digital Bank, Digi Ten and Digital Bank, while rejecting a proposal from an insurance company. Three further candidates, Japan Bangla Digital Bank, North East Digital Bank and Smart Digital Bank, were told they could be considered for licences later, contingent on watching how Nagad and Kori performed over their first six months of operation.

That performance never materialised on schedule. Nagad's founder had publicly stated an intention to launch digital banking services by March 2024, but the deadline came and went. By October 2024, reporting on the state of the rollout found that neither Nagad Digital Bank nor Kori Digital Bank had opened for business. Nagad's licence had landed under fresh review by a new Bangladesh Bank governor, while Kori was still working through compliance requirements and had been granted an extension to October 25, 2024, to sort them out. An anonymous Bangladesh Bank official captured the mood at the time bluntly, saying that if Kori missed that deadline too, the central bank would not even issue a further notice: the licence would simply and automatically lapse.

Why It Stalled, and Why That Matters Now

The three additional applicants waiting in the wings, Japan Bangla, North East and Smart Digital Bank, had their own fates tied explicitly to how Nagad and Kori performed, which meant the entire second wave of Bangladesh's digital banking sector was effectively frozen by the failure of the first two licensees to launch on time. That is the backdrop against which Amir Khosru's September 19 comments have to be read: this is not a brand new policy announcement so much as an attempt to restart a project that already has licences on paper, applicants waiting in a queue, and a track record of missed deadlines to explain.

Former Bangladesh Bank governor Ahsan H Mansur, speaking at the same dialogue, offered a version of events that suggests the delay was more about execution than a lack of planning. He noted that the digital bank initiative had previously stalled despite preparatory work, including drawing up applicant lists and developing licensing criteria, having already been completed during his own tenure at the central bank. In other words, the technical and regulatory groundwork for a functioning digital banking sector in Bangladesh has existed for some time; what has been missing is licensees capable of actually clearing compliance hurdles and building working infrastructure within the deadlines set for them.

What a Working Digital Bank Would Mean

Digital only banks, sometimes called neobanks elsewhere, typically operate without physical branches, relying entirely on mobile apps and online platforms to take deposits, extend credit and process payments. For Bangladesh, where mobile financial services like bKash and Nagad's own payments arm have already achieved enormous reach among unbanked and underbanked households, a licensed digital bank represents a further step: the ability to offer full banking products, including formal savings accounts and credit, to customers who may never set foot inside a branch.

That promise is closely tied to the financial inclusion goals the finance minister invoked in his remarks. Bangladesh has made real progress in areas like agent banking and mobile money, but access to formal credit for lower income and rural customers remains a persistent gap, one that shows up clearly in other corners of the financial system, from the low share of loan value reaching women agent banking customers to the difficulty many small traders report in accessing affordable working capital. A functioning digital bank sector, if it can finally get off the ground, is one of the tools policymakers have been counting on to help close that gap, alongside separate initiatives such as the bank backed venture capital fund launched earlier this year to support early stage companies.

A Cautious Restart

Neither the finance minister nor the former governor offered a specific timeline, number of licences, or list of applicants at the September 19 dialogue, a notable contrast with the concrete deadlines that accompanied the 2023 licensing round and that the sector has already missed twice. Whether that caution reflects lessons learned from Nagad and Kori's stumbles, or simply a reluctance to set another deadline this early in the process, is not yet clear. What is clear is that Bangladesh's digital banking sector now carries a track record that any fresh announcement has to live down: licences granted, launches promised, and, so far, no digital only bank actually serving customers.