The State Bank of Pakistan (SBP) has awarded the first restricted licence for pilot operations to Mashreq Bank Pakistan Limited (MBPL), allowing MBPL to operate as a digital retail bank in the country.
The development comes weeks after the central bank awarded its first digital retail banking (DRB) licence to easypaisa digital bank, marking a significant milestone in the country’s efforts to expand financial services to unbanked and underserved populations.
“The Governor, State Bank of Pakistan [Jameel Ahmad] awarded the first restricted licence for pilot operations to Mashreq Bank Pakistan Limited in a special meeting held with the Board and senior management of MBPL,” SBP said in a statement on Friday.
The SBP governor shared his expectations for MBPL to maintain high standards of excellence by leveraging cutting-edge technologies like artificial intelligence (AI) and cloud computing to offer seamless and personalised banking services.
“He [Ahmad] further encouraged MBPL to contribute to the transformation of Pakistan’s banking landscape by adhering to rigorous regulatory standards while fostering competition and innovation within the sector,” the statement read.
MBPL is a wholly owned subsidiary of Mashreq Bank PSC (UAE), which brings with it a rich history of innovation, customer-centricity, and agility in the banking sector, according to the SBP statement.
“Mashreq Bank’s extensive regional and global presence, including offices in Europe, Asia, Africa, and the U.S., provides it a strong foundation to emulate in Pakistan.”
The SBP introduced a regulatory framework for licencing full-fledged digital banks in 2022, enabling both fintech startups and traditional banks to establish fully digital banking services.
The framework offered two types of licences: Digital Retail Bank (DRB) and Digital Full Bank (DFB), with operations conducted exclusively through digital channels.
To foster competition, the SBP adopted a cohort-based approach, initially granting up to five licences.
“The initiative attracted significant interest, with 20 applications submitted by major financial players,” the SBP said.
The central bank issued no-objection certificates (NOCs) to five institutions: Easypaisa Bank Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited (RIDBL), HugoBank Limited, and KT Bank Limited.
“This framework has been designed to empower digital banks to meet evolving customer demands by offering convenient and accessible digital services,” the SBP governor was quoted as saying in the statement.
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