bKash and Pragati Life Insurance Ltd yesterday became the latest companies in Bangladesh to share plans to roll out digital banks as the country looks to offer financial services using technologies and accelerate financial inclusion.   

In a post on the Dhaka Stock Exchange, Brac Bank, one of the owners of bKash, said its board has decided to invest in establishing a digital bank, a form of banking that does not have branches and offers services both via desktop website and mobile apps.

The setting up of the proposed digital bank named "bKash Digital Bank PLC" is subject to the approval of the Bangladesh Bank, it said.

Launched in 2011, bKash is a joint venture of Brac Bank, US-based Money in Motion LLC, the International Finance Corporation of the World Bank Group, the Bill and Melinda Gates Foundation, Ant Group, and SoftBank Vision Fund.

Currently, it has 7 crore verified customers.

Brac Bank's share closed unchanged at Tk 35.80 on the DSE yesterday.

Three more listed companies ACI Ltd, Bank Asia and Crystal Insurance shared plans to roll out digital banks.

The bank's earnings per share rose 41 per cent year-on-year to Tk 1.93 in the January-June of 2023.

Under the supervision of the central bank, bKash has been practising digital lending for the last three and a half years, Shamsuddin Haider Dalim, head of corporate communications of the largest mobile financial service provider in the country, told The Daily Star.

"After piloting for a year with a commercial bank, bKash launched the country's first digital nano loan. Besides, bKash has rolled out digital savings schemes with four commercial banks and a financial institution."

He said the shareholders of bKash all have long and proven experience of working on financial inclusion as well as world-class digital banks.

"This global experience, along with our 12 years' involvement in Bangladesh's financial inclusion through digital services, has made us interested in applying for a digital bank."

In a separate post on the DSE, Pragati Life Insurance Ltd said its board has decided to invest 10 percent of its paid-up capital, or Tk 12.50 crore, in the proposed digital bank named Pragati Digital Bank.

Shares of the insurer, however, slipped 5.77 per cent to Tk 129.

The central bank invited applications for forming digital banks from June 21 and the deadline was initially set at August 1.

The deadline was extended to August 17 to give entrepreneurs more time to prepare detailed and quality applications with all the necessary documents.

Three more listed companies ACI Ltd, Bank Asia and Crystal Insurance shared plans to roll out digital banks.

Globally, digital banking is on the rise and the trend accelerated owing to the coronavirus pandemic, which forced people to work, communicate, study, purchase and get entertained online.

Over the years, Bangladesh has also joined the shift, driven by the rising internet population and growing adoption of mobile banking and digital payments.

The massive success of mobile financial service providers, which have put some form of banking services in the hands of users, has paved the way for digital banking in a country where many people still don't have access to the traditional financial system.

According to research from a global firm, the global digital banking market is expected to reach $30.75 billion by 2027, with an annual growth rate of 19 per cent.