Amid various challenges and instability in the country’s banking sector, Bangladesh Bank approved in principle five digital banks at once at a board meeting held on Thursday, chaired by Bangladesh Bank Governor Md Mostaqur Rahman. The five banks are DK Digital Bank Ltd, bKash Digital Bank, Nova Digital Bank, Boost Digital Bank and Kori Digital Bank. Through these app-based banking services, customers will be able to deposit money, take small loans, pay bills and conduct transactions from home.
Several groups and individuals, including ACI, Mohammadi Group and Paragon, are among the sponsors of Kori. DK Limited is being established at the initiative of Bhutan’s DK Bank. The shareholders of mobile financial services (MFS) provider bKash are behind bKash Digital Bank. Nova Digital Bank is being established by VEON, the parent company of Banglalink, and Square Group. Meanwhile, Boost Digital Bank is being sponsored by Axiata Limited, the parent company of Robi.
The five banks will now be issued letters of intent (LoIs). Bangladesh Bank Executive Director and Spokesperson Arif Hossain Khan said final licences would be issued after the banks complete other formalities, including arranging the required paid-up capital.
He said: “After analysing all the documents submitted by the applicants and considering their experience, four new applications have been accepted. The LoI for Kori Digital Bank had already been approved in 2023, but it was subsequently suspended. At the board meeting, the suspension on Kori was lifted alongside the issuance of new LoIs for the other four.”
Bangladesh Bank approved the digital banks at a time when the country’s banking sector and economy are facing multiple challenges. More than BDT 6.06 trillion in loans in the banking sector are classified as non-performing, giving Bangladesh the highest non-performing loan ratio in the world. Nearly half of the 62 scheduled banks under the central bank are now in poor condition, and many banks are also struggling to repay depositors’ money. Against this backdrop, five digital banks have been approved at once without first reforming the distressed and troubled banks.
Bank executives believe the approval of so many digital banks at once could increase instability in the banking sector rather than reduce it. Several senior bank executives told Bonik Barta that nine private banks were granted licences at once in 2012. The banking sector has yet to recover from that shock. Three of those banks, known as fourth-generation banks, are now on the verge of being wound up, while another two or three are struggling with various challenges. Against this backdrop, the country also lacks enough skilled personnel to launch so many digital banks simultaneously. The banking sector is also facing a crisis of confidence alongside the economic slowdown. How successful digital banks will be in such circumstances remains to be seen.
Digital banks have been emerging in various countries over the past two decades with the use of modern information technology. Unlike conventional banks, which conduct day-to-day transactions through branch-based operations, digital banks have a fully digital infrastructure at the core of their business. They do not have physical branches; instead, services such as account opening, deposit-taking, lending, money transfers and card services are provided through mobile apps or online platforms. Such institutions are also known as digital-only, virtual or internet-only banks.
Security First Network Bank in the United States is considered the world’s first internet-only bank, which began operations in October 1995. Branchless banking subsequently expanded in the United States, the United Kingdom and several other countries. But digital banks have expanded most rapidly across Asia, Europe and Latin America over the past decade. Separate regulatory frameworks for such banks have been introduced in countries and regions including Hong Kong, South Korea, Singapore, Malaysia, the Philippines, Taiwan and Pakistan.
The success of digital banks worldwide has, however, come under pressure as conventional banks have expanded their technology-driven services and app-based operations. On the issue, Mohammad Ali, managing director of Pubali Bank, told Bonik Barta, “Digital banks haven’t achieved much success in the countries where they’ve been launched. With advances in technology, conventional banks themselves have introduced all kinds of digital services. Despite being a first-generation bank, Pubali Bank now want customers to enjoy banking services from home rather than having to visit a bank. To this end, we’ve overhauled our entire technological infrastructure over the past few years. Customers are also using these services with confidence.”
The initiative to launch digital banks in Bangladesh began in 2022. As part of the process, Bangladesh Bank issued a policy on June 14, 2023. The central bank invited applications for digital banks that year, receiving more than 50 applications. Although it initially decided to issue licences to five banks, letters of intent were issued to Nagad Digital Bank and Kori. The central bank also issued a licence to Nagad Digital Bank. But following the 2024 mass uprising, the central bank reversed its earlier decision.
A fresh call for applications to establish digital banks was issued in September 2025, and 12 applications were submitted. They were British Bangla Digital Bank PLC, Digital Banking of Bhutan-DK, Amar Digital Bank-22 MFI, 36 Digital Bank PLC, Boost-Robi, Amar Bank, App Bank-Farmers, Nova Digital Bank-Banglalink & Square, Maitri Digital Bank PLC, Upokari Digital Bank, Munafa Islami Digital Bank-Akij and bKash Digital Bank. Of these, the central bank considered four new applications yesterday.
A digital bank is a form of banking service based on the internet and mobile apps, according to the Bangladesh Bank’s relevant policy. Under the guidelines for establishing this specialised type of bank, a digital bank will have only a head office for its operations. But it will be branchless in terms of service delivery, meaning the bank will not provide any over-the-counter (OTC) services. A digital bank will not have its own branches or sub-branches, ATMs, cash deposit machines (CDMs) or cash recycling machines (CRMs). All services will be app-based and provided through mobile phones or digital devices. Digital banking services will be available around the clock.
Under the policy, digital banks may offer virtual cards, QR codes and other technology-based products to facilitate customer transactions. But they will not be allowed to issue plastic cards for transactions. Customers will be able to use various services of other banks, including ATMs and agent banking, to access digital banking services. A digital bank will not be allowed to open letters of credit (LCs) and provide loans to large and medium-sized industries. It will only be allowed to offer small loans.
The policy also states that each digital bank must launch an initial public offering (IPO) within five years of receiving its licence. The size of the IPO must be at least equal to the sponsors’ initial investment. The paid-up capital required to establish a digital bank will be BDT 3 billion.
There is no single figure for the exact number of countries where digital banks currently operate worldwide. This is because some jurisdictions issue separate digital bank licences, while others allow branchless banks to operate under conventional banking licences. But some estimates suggest that there are more than 750 digital banks worldwide, serving around 1.8 billion customers.
A recently published study by research firm TABInsights analysed more than 190 digital banks across over 40 markets. According to the firm, the combined assets of the world’s top 100 digital banks stood at around $1.4 trillion in 2024. Their deposits amounted to $1.1 trillion, while their loans stood at around $700 billion.
In 2023, 57 of the top 100 digital banks were profitable, while the number rose to 62 in 2024. Among the leading digital banks are Nubank of Brazil, WeBank and MYbank of China, and KakaoBank and K-Bank of South Korea. In the 2026 ranking, Nubank, WeBank and MYbank occupy the top three positions. The median asset growth rate among the top 100 digital banks was 21.6 percent.
Anis A Khan, one of the sponsors of Kori Digital Bank, told Bonik Barta, “We’ve been waiting for quite some time to start Kori’s operations. Several reputable corporate groups and individual entrepreneurs are with us. We’ve also raised the capital required to establish the bank. We hope to start operations soon.”
Describing digital banks as a new type of institution, he said, “There will be some challenges during the initial stage of operations. We’ll therefore review the experience of countries where digital banks have been successful and move forward accordingly.”