Circulars/Notifications - Banking Policy & Regulations Department  
 BPRD Circular No. 01 of 2022
January 03, 2022

The Presidents/ Chief Executives
All Banks/ DFIs/ MFBs/EMIs

Dear Sir/Madam,

Licensing and Regulatory Framework for Digital Banks

  1. In recent times, technology-based innovations have been deeply engrained within the financial sector. This development has not only supported the digital transformation of financial ecosystem but it has also enhanced the efficiency of the industry. The digital banking solutions have paved the way for improvement of service quality standards in the banking sector and enabled the service providers to efficiently cater to the growing needs of banking customers. State Bank of Pakistan (SBP) has always endeavored to provide an enabling regulatory landscape for nurturing these digital innovations while ensuring stability, safety and soundness of country’s banking sector.

  2. In pursuance of above objectives, SBP has developed a licensing and regulatory framework for setting up digital banks in Pakistan. The primary aims of this framework inter alia include enhancement of financial inclusion, provision of affordable/cost effective digital financial services especially to unserved and underserved segments of the society and fostering a new set of customer experience. This framework facilitates, incumbents as well as new financial institutions, international banking players, non-banking financial institutions and Digital Financial Service (DFS) providers, to establish a digital bank in Pakistan for providing a full suite of banking services through digital and electronic channels.

  3. The framework, divided into two parts and supplemented with six appendices, provides complete guidance to the applicants regarding licensing requirements, eligibility criteria for sponsors of digital banks, regulatory capital requirements, guiding regulations for digital banks, business operations allowed during different phases and list of documents required with the licensing application. It is expected that the licensing of digital banks with innovative business models will add dynamism and innovation in the banking landscape to serve the relevant stakeholders in a better way, ultimately contributing towards financial inclusion and digitization.

  4. SBP has decided to limit initially the number of digital banks’ license up to five (05) and applications in this regard will be accepted until March 31, 2022. The applicants intending to apply for digital bank’s license under this framework may submit their requests along with all the requisite documents at [email protected]. Moreover, if required, interested applicants may approach SBP for any clarification at [email protected].

  5. Please acknowledge receipt.

    Enclosure: Licensing and Regulatory Framework for Digital Bank

Yours truly,


(Muhammad Akhtar Javed)

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