Digital Retail Banks: Framework Established by State Bank of Pakistan
The State Bank of Pakistan (SBP) has established a framework for digital retail banks (DRBs), outlining the key points and process for obtaining a DRB license. Below are some essential requirements and steps:
Application Process and Requirements
To commence commercial operations, an applicant must obtain a restricted license from SBP.
Required Documents
- A Board resolution authorizing the application for commencement of commercial operations
- A detailed report demonstrating readiness for launch, including:
- Details of pilot stage outcomes
- Infrastructure deployed
- Capabilities augmented for commercial operations
Additional Documentation and Assessment
SBP may require additional documentation or information from the applicant. SBP shall assess the applicant’s readiness for commercial launch through on-site inspection and performance during pilot operations.
- On-site inspection
- Pilot operation performance assessment
- Third-party assessment report (optional)
Grant of License and Commercial Operations
After complying with all requirements within the validity period of the restricted license, including fulfilling the minimum capital requirement (MCR), SBP may grant a license to commence commercial operations under transition phase with new terms and conditions.
Timeline for Commercial Operations
The applicant shall initiate commercial operations within the timelines stipulated in the license, at which point the transition phase shall commence.
Additional Requirements for Specific Applicants
Digital Bank Subsidiary of a Traditional Bank
- A traditional bank may apply for a DRB license if it meets the capital guidelines and supervisory rating as acceptable to SBP.
- Capital guidelines
- Supervisory rating
Sponsors of MFBs and EMIs Applying for Digital Retail Bank License
In addition to general requirements, an application made by those having majority stake in or exercising control over an MFB or EMI shall be accompanied by:
- Audited financial statements
- Internal audit findings
- Business strategy
- Digital strategy
- IT organogram
- Human resource capacity and competencies
- Customer experience survey
- Service quality reports
Transformation of EMI into Digital Retail Bank
An EMI with a minimum one-year experience of providing DFS from the commencement of commercial operations as an EMI may apply to SBP for transformation into a DRB.
Note: These points are based on the provided text and might not be an exhaustive list of all requirements or processes related to obtaining a DRB license in Pakistan.