Mashreq Bank Awarded Pilot License for Digital Banking

The State Bank of Pakistan (SBP) has awarded its first restricted license for pilot digital banking operations to Mashreq Bank Pakistan Limited (MBPL), marking a major step toward the country’s digital financial transformation. The license was granted in a special meeting attended by SBP Governor, Deputy Governor, and senior officials, along with the board and management of MBPL.

MBPL, a wholly owned subsidiary of UAE-based Mashreq Bank PSC, benefits from its parent company’s strong global presence across Europe, Asia, Africa, and the U.S., bringing a legacy of innovation and customer-focused banking to Pakistan.

In 2022, SBP introduced a regulatory framework for full-fledged digital banks, allowing fintech firms and traditional banks to offer banking services exclusively through digital channels. The framework offers two categories of licenses: Digital Retail Bank (DRB) and Digital Full Bank (DFB). To encourage competition, SBP initially planned to issue up to five licenses and received 20 applications from leading financial institutions. After a rigorous evaluation, No-Objection Certificates (NOCs) were granted to five entities: Easypaisa Bank Limited, Mashreq Bank Pakistan Limited, Raqami Islamic Digital Bank Limited, HugoBank Limited, and KT Bank Limited.

SBP Governor urged MBPL to maintain high banking standards by leveraging advanced technologies such as artificial intelligence (AI) and cloud computing to enhance customer experience. He also emphasized the need for strong cybersecurity measures to protect customer data and ensure trust in the digital financial ecosystem.

Reaffirming SBP’s commitment to financial innovation, he highlighted that the licensing framework for digital banks is designed to expand financial inclusion and offer more accessible banking services. The move is expected to modernize Pakistan’s financial sector by fostering competition, encouraging technological advancements, and strengthening the country’s digital banking infrastructure.