This document outlines Pakistan's framework for digital bank licensing. It defines two types of digital bank licenses - Digital Retail Banks (DRBs) and Digital Full Banks (DFBs). DRBs focus on retail customers, while DFBs serve retail customers, small/medium enterprises, businesses, and corporations. The minimum capital requirement for a DRB is $5.5 million initially, increasing to $14 million over three years. As of February 2023, the State Bank of Pakistan has issued five digital bank licenses under this framework.

1. DIGITAL BANK
LICENSE
FRAMEWORK
A Pakistan case study
Key-points for aspiring digital banks & talent
How to get a digital bank license in Pakistan
A summary of a good
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2. THROUGH
DIGITAL
PLATFORMS
instead of physical branches.
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A digital bank is a bank which offers all
kinds of financial products & services
primarily
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3. MUST
PROMOTE
FINANCIAL
INCLUSION,
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The recipients of digital bank licenses
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4. CREDIT ACCESS
TO THE
UNSERVED &
UNDERSERVED
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They must provide
population,
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5. PROVIDE
AFFORDABLE &
COST-
EFFECTIVE
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They must provide
digital financial services
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6. FINANCIAL
TECHNOLOGY
INNOVATION
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They must encourage the application of
(FinTech), and
in banking
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7. CUSTOMER
EXPERIENCES,
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They must foster a new set of
and
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8. DEVELOP THE
DIGITAL
ECOSYSTEM.
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They should further
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9. DRB
DFB
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The two types of digital bank licenses in
this digital bank license framework are:
and
Digital Retail Bank
Digital Full Bank
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10. DRB
DFB
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Digital Retail Banks focus on retail
customers
Digital Full Banks focus on retail
customers, SMEs, businesses &
corporate entities.
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11. Evans Munyuki
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5.5m USD in the pilot phase
It will increase to 14m USD over 3 years
The Minimum Capital Requirement
for DRBs is:
This is much better than the 500m
USD capital requirement digital
banks face in other countries.
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12. Evans Munyuki
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DRBs may graduate to receive a DFB
license subject to capital requirement
fulfillment & satisfactory two-year
progress reporting.
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13. Evans Munyuki
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The framework is designed for
setting-up of a new digital bank,
however, based on a viable business
case & satisfactory Digital Financial
Services (DFS) experience, traditional
banks & Micro Finance Banks (MFBs)
may ask to convert their institution
into a digital bank.
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14. Evans Munyuki
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WHO CAN SPONSOR A DIGITAL BANK
LICENSE APPLICATION IN PAKISTAN?
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A traditional bank with a minimum of
1 year experience in delivering Digital
Financial Services (DFS) in the retail
customer segments.
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16. Evans Munyuki
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An international bank or international
DFS entity with a successful track
record of 3+ years of delivering DFS in
the retail customer segments.
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17. Evans Munyuki
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An Electronic Money Institution (EMI)
seeking conversion into a digital bank
with a minimum of one-year
experience in delivering DFS in the
retail customer segments.
EMIs are entities that offer innovative,
user-friendly and cost-effective low-
value digital payment instruments
like wallets, prepaid cards, and
contactless payment instruments.
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18. Evans Munyuki
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Majority stake holders in or those
exercising control over a MFB (Micro
Finance Bank), EMI (Electronic Money
Institution), international bank or
international DFS entity having a
successful track record of 3+ years of
delivering DFS in the retail customer
segments.
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19. Evans Munyuki
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Any person with a minimum of 3
years of experience in the financial
services, financial technology,
telecommunication, merchant
aggregation technology platforms,
Information Communication
Technology (ICT), or other pertinent
digital or innovative financial & non-
financial domains. Minimum of 5%
equity in the proposed digital bank.
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20. Under this framework, as of February
13th 2023, The State Bank of Pakistan
has issued five Digital Bank licenses to
Easy Paisa DB, Hugo Bank, KT Bank,
Mashreq Bank, and Raqami.
Great job Pakistan.
This framework can be a reference
point for countries that are yet to
create their digital bank license
frameworks.
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21. Evans Munyuki
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emunyuki@yahoo.com
https://www.linkedin.com/in/evansmunyuki/
If you need help building a digital
bank, feel free to contact me.
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Source: https://www.sbp.org.pk/dfs/Digital-Bank-Regulatory.html