Mashreq Bank gets license to operate as digital bank in Pakistan

The State Bank of Pakistan (SBP) has granted the first restricted license for pilot operations to Mashreq Bank Pakistan Limited (MBPL).

This milestone follows the earlier issuance of the first Digital Retail Bank (DRB) license to a microfinance bank for commercial operations earlier this year.

MBPL, a wholly owned subsidiary of Mashreq Bank PSC (UAE), boasts a strong legacy of innovation, customer-centricity, and agility. Mashreq Bank's extensive presence across Europe, Asia, Africa, and the U.S. lays a solid foundation for its operations in Pakistan.

In 2022, SBP introduced a regulatory framework for licensing digital banks, aiming to enable both fintech startups and traditional banks to offer fully digital banking services.

The framework provides two license types: Digital Retail Bank (DRB) and Digital Full Bank (DFB), with operations conducted exclusively through digital channels.

To encourage competition, SBP adopted a cohort-based approach, initially issuing up to five licenses. The initiative received significant interest, with 20 applications from major financial players. After rigorous evaluation, SBP issued No-Objection Certificates (NOCs) to five institutions: Easypaisa Bank Limited, Mashreq Bank Pakistan Limited (MBPL), Raqami Islamic Digital Bank Limited (RIDBL), HugoBank Limited, and KT Bank Limited.

Governor SBP expressed expectations for MBPL to uphold high standards of excellence by leveraging advanced technologies like artificial intelligence (AI) and cloud computing to provide seamless and personalized banking services.

He encouraged MBPL to contribute to transforming Pakistan's banking landscape by adhering to strict regulatory standards while fostering competition and innovation.

Digital banks are expected to play a crucial role in providing affordable financial services to underserved and unbanked populations.

As digital banking evolves, SBP remains committed to ensuring these banks prioritize technological innovation, seamless customer experiences, and strong regulatory compliance, essential pillars for building a future-ready financial system in Pakistan, a statement noted.