EBL joins the fray to invest in digital bank

Eastern Bank Ltd (EBL) is going to invest Tk 12.5 crore to be a sponsor shareholder of a proposed digital bank, according to a decision of the board of the private bank taken yesterday.

The name of the proposed digital bank is Digi10 Bank PLC, in which the private bank will hold 10 percent share of the initial paid-up capital of Tk 125 crore.

The investment will be done subject to all regulatory approval, as per the decision of the EBL board.

The disclosure by EBL comes after a number of banks unveiled their decision to invest in establishing digital banks, for which Bangladesh Bank called for applications from the third week of June.

EBL plans to become a sponsor in the Digi10 Bank PLC alongside The City Bank and other private banks.

Early this week, The City Bank said it would invest Tk 13.88 crore in the proposed Digi10 Bank Plc.

Apart from these banks, Bank Asia, bKash, Pragati Life Insurance, ACI Ltd, Padma Bank, Banglalink and Crystal Insurance have also made public their decision to invest in setting up digital banks.

The central bank's move comes within a week after it approved guidelines regarding the establishment of digital banks, which will provide financial services alongside the existing 61 conventional banks.

In its guideline published earlier, the central bank said digital banks will not be allowed to provide any service to clients directly through physical counters and cannot issue any physical instruments.

Likewise, digital banks would not be permitted to give out loans to carry out foreign trade or term loans to medium and large industries, according to Bangladesh Bank.