Phased budget · Banking and fintech
From Letter of Intent to digital bank licence in Bangladesh
For the digital banks approved in September 2026, future applicants and their sponsors and investors: we turn Bangladesh Bank's conditions into a workplan and prepare the shareholder, governance, outsourcing, data protection and AML/CFT documents needed for a final digital bank licence.
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Who this is for
Why it matters now
Digital bank licence
On 24 September 2026 the Bangladesh Bank board gave initial approval to proposed digital banks including bKash Digital Bank, Nova Digital Bank, Boost Digital Bank and Digital Banking of Bhutan, and decided to issue a Letter of Intent to Kori Digital Bank [1]. Bangladesh Bank has said final licences will be issued later, once each applicant fulfils the conditions attached to its approval [2]. For sponsors, the period between a Letter of Intent and a final digital bank licence is when capital, governance, technology and contracts have to be put into final form, and when gaps are most expensive to fix.
The rules have also moved. Minimum paid-up capital was raised from Tk 125 crore to Tk 300 crore, made up only of ordinary shares, under section 13 of the Bank Company Act 1991, and a digital bank must hold an initial public offering within five years of its licence [4]. The second application round tightened sponsor eligibility: shell companies, sponsors facing loan-default litigation and banks and finance companies operating in Bangladesh cannot sponsor, dual citizens must disclose all citizenships and the fit and proper test is stricter [5].
Digital banks may keep only a head office, with no branches, ATMs, over-the-counter services or plastic cards, and may not open letters of credit or lend to large and medium industries [3]. That model puts most of the legal risk into technology outsourcing, cloud hosting, remote onboarding and data. The Personal Data Protection Act 2026 now applies to the processing of personal data connected with Bangladesh [7], and anti-money laundering controls have to work without a branch network to fall back on.
What is included
What our digital bank licence service includes
A clause-by-clause tracker of every condition in your Letter of Intent or approval, with the owner, the evidence Bangladesh Bank is likely to expect and the document that will satisfy it, updated as work progresses.
Drafting or reviewing the shareholders' agreement, joint venture agreement and subscription documents, including board nominations, reserved matters, deadlock, capital calls, share transfer restrictions and the path to the required initial public offering.
Preparing the governance package: board and committee structure, terms of reference, and the fit and proper declarations and supporting papers for sponsors, directors and senior management that Bangladesh Bank will review.
Reviewing or drafting core banking, cloud hosting, payments, customer support and other outsourcing agreements, with attention to audit and access rights, data location, business continuity, exit and the regulator's ability to inspect.
A data map, privacy notices, consent records, processor terms and a breach response plan aligned with the Personal Data Protection Act 2026, built into product design before the bank opens to customers.
A legal review of the anti-money laundering and counter-terrorist financing policy, customer due diligence for digital onboarding, sanctions screening and suspicious transaction reporting arrangements, with gaps flagged for the compliance team.
Assembling the final submission, preparing cover letters and responses to Bangladesh Bank queries, and coordinating with auditors and technical advisers so the digital bank licence file is consistent across legal, financial and technology papers.
How it works
Digital bank licence, step by step
- Conditions reviewPhase 1
We read the approval or Letter of Intent, your application file and sponsor documents, list every condition and open question, and identify which ones depend on third parties such as auditors, cloud providers or foreign regulators.
- Workplan and budgetPhase 1
We agree a workplan that names an owner and a target date for every condition, and a phased budget with a cap for each workstream, confirmed in writing before the next phase starts so sponsors can approve costs in advance.
- Corporate and shareholder documentsPhase 2
We finalise the shareholders' or joint venture agreement, constitutional documents, board and committee papers and fit and proper files, and align the share structure with the capital and listing requirements.
- Technology, data and outsourcing contractsPhase 2
We negotiate cloud, core banking and other outsourcing contracts, and build the data protection programme and processor terms, so that the operating model in the contracts matches what was described to Bangladesh Bank.
- Compliance frameworkPhase 2 to 3
We review the AML/CFT policy, remote onboarding procedures, sanctions screening and customer terms, and prepare the legal parts of the compliance manual so the compliance team can test them before the bank opens to customers.
- Final digital bank licence filePhase 3
We assemble the final submission, answer Bangladesh Bank queries, keep the legal, financial and technology papers consistent, and track the file until a decision is made on the final licence, keeping sponsors informed at each stage.
- Post-licence supportOngoing, if required
After licensing we can continue on a separate retainer covering regulatory correspondence, new product reviews, changes to outsourcing arrangements and data protection questions as the bank grows and its customer base expands.
Each phase has its own budget with a cap, agreed in writing before that phase starts. The budget depends on the number of conditions in the approval, how many sponsors and agreements are involved, how many outsourcing contracts need negotiation and whether foreign law advice is needed. Government and regulatory fees are passed through at cost.
We confirm the fee in writing before any work starts. Government fees, court fees and stamp duty are passed through at cost.Questions
Digital bank licence: questions
Which digital banks received approval on 24 September 2026?
The Bangladesh Bank board gave initial approval to Digital Banking of Bhutan, sponsored by Bhutan's DK Bank; bKash Digital Bank; Nova Digital Bank, backed by VEON and Square Group; and Boost Digital Bank, sponsored by Axiata, and decided to issue a Letter of Intent to Kori Digital Bank [1][2]. Applications in that round were accepted from 1 September to 2 November 2025 [1]. Bangladesh Bank has said final licences will be issued later [2].
Does a Letter of Intent mean a digital bank can start operating?
No. Initial approval allows Bangladesh Bank to issue a Letter of Intent, and the applicant must then complete the necessary formalities before it can begin online operations and move to the next licensing stage [1]. Each firm must fulfil all of its conditions before it receives a final licence [2]. The conditions themselves are set out in each bank's own approval, which is why the first step in this pack is a clause-by-clause review of yours.
How much capital does a digital bank licence require?
Bangladesh Bank raised the minimum paid-up capital for a digital bank from Tk 125 crore to Tk 300 crore, which must be provided by sponsors and made up only of ordinary shares [4]. A digital bank must also hold an initial public offering within five years of its licence, raising no less than the sponsors' initial paid-up capital [4]. The application fee in the 2025 round was Tk 5 lakh [5].
Can foreign investors sponsor or invest in a digital bank?
Foreign groups are among the sponsors approved in September 2026, including Bhutan's DK Bank, Axiata and VEON [1]. Sponsor rules still apply to them: shell companies without their own business or assets in their home country cannot sponsor, the fit and proper test is tighter and dual citizens must disclose all citizenships [5]. The original guideline also restricted transfers of sponsor shares within five years of operation without Bangladesh Bank approval [6], which the shareholders' agreement must reflect.
What can a digital bank not do?
Under the policy a digital bank may have only a head office for administration, with no branches, sub-branches, ATMs, cash deposit or recycling machines, over-the-counter services or physical booths [3]. It may offer virtual cards and QR payments but not plastic cards, and its customers may use other banks' ATMs and agent outlets [3]. It cannot open letters of credit or lend to large and medium industries, and may offer only small loans [3].
How does data protection law affect a digital bank?
The Personal Data Protection Act 2026 applies to processing in Bangladesh and to processing abroad connected with services offered to people in Bangladesh [7]. Data fiduciaries must keep processing records in a register for at least five years and notify the Authority of breaches likely to cause significant harm, in the manner set by regulation [7]. For a branchless bank, almost every customer interaction is a data processing event, so these duties shape product and vendor design.
Sources
- Dhaka Tribune: 5 digital banks get Bangladesh Bank's initial nod (24 September 2026)
- bdnews24.com: Bangladesh Bank board approves digital banks (24 September 2026)
- bdnews24.com: Digital bank licensing, second round (August 2026, updated September 2026)
- The Daily Star: Digital banks must have paid-up capital of Tk 300cr: BB (24 August 2025)
- The Business Standard: Cenbank invites fresh applications for digital bank licence from 1 September (26 August 2025)
- The Daily Star: BB frames rules for setting up digital banks (14 June 2023)
- Personal Data Protection Act 2026 (Act No. 63 of 2026), Laws of Bangladesh
Related
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General information on the law of Bangladesh, not legal advice. Sending an enquiry does not create a lawyer-client relationship.