Eastern Bank Ltd (EBL) has made a strategic decision to invest Tk 12.5 crore in becoming a sponsor shareholder for the upcoming digital bank, Digi10 Bank PLC. The board of EBL, a prominent private bank, finalized this move in a recent meeting.
Digi10 Bank PLC is set to have an initial paid-up capital of Tk 125 crore, with EBL securing a 10 percent stake in the venture.
This decision is contingent upon obtaining all necessary regulatory approvals, underscoring EBL’s commitment to operating within the regulatory framework.
This announcement follows a trend of various banks revealing their intentions to invest in establishing digital banks.
Bangladesh Bank opened the door for such initiatives by inviting applications in late June. EBL is joining forces with The City Bank and other private financial institutions as a sponsor in the Digi10 Bank PLC venture.
The City Bank, in alignment with this movement, has declared its own investment of Tk 13.88 crore into the proposed Digi10 Bank PLC. Several other entities, including Bank Asia, bKash, Pragati Life Insurance, ACI Ltd, Padma Bank, Banglalink, and Crystal Insurance, have publicly expressed their commitment to investing in developing digital banks.
Bangladesh Bank’s proactive approach follows the approval of guidelines to facilitate the establishment of digital banks.
These new players will operate alongside 61 conventional banks, expanding the financial services landscape. The regulatory framework defines certain limitations for digital banks.
They will not be authorized to conduct client-facing operations through physical counters, nor can they issue physical instruments.
Digital banks are prohibited from extending loans for foreign trade activities or providing term loans to medium and large-scale industries, as per the guidelines set by Bangladesh Bank.
This approach ensures that digital banks focus on innovative financial solutions within the outlined parameters.
As EBL commits a significant investment to become a sponsor shareholder in Digi10 Bank PLC, it stands at the forefront of the evolving financial landscape in Bangladesh.
The rise of digital banks marks a pivotal moment in the country’s banking sector, with various players gearing up to provide modern, technology-driven financial services to a wider audience.
