Nigeria-born digital banking platform, Kuda, is on its way to power digital banking services in Pakistan, as the fintech is set to acquire a digital banking licence from the State Bank of Pakistan (SBP). This licence will be issued to “KT Bank”, a joint venture between Kuda and two leading Pakistani companies, positioning the fintech as one of the five companies to receive the highly coveted digital banking licence in the country. Kuda and four other banks edged out 15 other applicants for this licence, including all the Pakistani commercial banks that applied.
As the digital revolution sweeps across financial markets globally, more central banks are creating frameworks and licences that ensure market optimisation and enable proper regulatory control of the digital banks within their country’s borders. In December 2020, Nigeria’s apex bank released a new categorisation of licences for the payments system, setting a six-month observation period between the issuance of an approval-in-principle and the licence to operate as a payment solutions service provider.
In January 2022, Pakistan’s central bank followed suit, launching its new licensing and regulatory framework for digital banks. According to the SBP, the new licences will spur financial inclusion and pilot with only five licences. This limited number of licences seemed to make them a collector’s item of some sort, with mega digital banking players like the Sequoia-backed Dbank, South Africa’s Tyme Bank, and homegrown...
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