In a significant milestone for Pakistan’s digital banking sector, the State Bank of Pakistan (SBP) has awarded a restricted pilot license to Mashreq Bank Pakistan Limited (MBPL), allowing it to commence operations as a Digital Retail Bank (DRB). The announcement was made during a special meeting attended by SBP Governor, MBPL’s Board of Directors, and senior management, along with SBP’s Deputy Governor and senior executives.
This development marks another crucial step in SBP’s digital banking roadmap, following the issuance of the first-ever DRB license for commercial operations to a microfinance bank earlier this year. MBPL, a wholly owned subsidiary of Mashreq Bank PSC (UAE), brings with it decades of experience in financial innovation, customer-centric services, and agility in digital banking. With an extensive presence across Europe, Asia, Africa, and the United States, Mashreq Bank’s global expertise is expected to contribute to Pakistan’s rapidly evolving digital financial ecosystem.
SBP has been actively fostering digital transformation in the financial sector through progressive regulatory measures. In 2022, the central bank introduced a comprehensive framework for licensing full-fledged digital banks, enabling fintech firms and traditional banks to operate exclusively via digital channels. Under this framework, SBP created two categories of digital bank licenses—Digital Retail Bank (DRB) and Digital Full Bank (DFB). To ensure a competitive and innovative environment, SBP adopted a cohort-based approach, initially granting up to five licenses from a pool of 20 applicants. Following a 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.
During the license handover, SBP Governor expressed high expectations from MBPL, emphasizing the importance of leveraging advanced financial technologies such as artificial intelligence (AI) and cloud computing to deliver seamless, secure, and customer-friendly digital banking solutions. He encouraged MBPL to play a transformative role in reshaping Pakistan’s banking landscape by maintaining stringent regulatory standards, fostering competition, and promoting innovation.
The SBP Governor reaffirmed the central bank’s commitment to supporting digital innovation in the financial sector, highlighting that the licensing framework for digital banks is a strategic initiative aimed at enhancing financial inclusion and modernizing Pakistan’s banking industry. He stressed that digital banks must prioritize resilience in their digital infrastructure to combat cybersecurity threats, as secure operations and data protection are fundamental to maintaining customer trust and financial system integrity.
The emergence of digital banks is expected to significantly improve financial accessibility, particularly for underserved and unbanked populations. With the continued growth of digital banking, SBP remains dedicated to ensuring that licensed digital banks adhere to technological advancements, provide seamless customer experiences, and maintain robust regulatory compliance. As Pakistan embraces digital transformation in banking, institutions like MBPL are set to play a pivotal role in shaping a secure, inclusive, and tech-driven financial ecosystem.
