The board of Bangladesh Bank (BB) today approved the guideline on digital bank with an aim to expedite the process of cashless transaction and digital transformation in the country.

"We are moving towards digital transformation of banking. We will issue the guideline soon and call for applications from investors to set up digital bank," BB Spokesperson Md Abul Bashar said after a meeting of the central bank board.

As per the guideline, investors willing to set up a digital bank will have to have a paid-up capital of Tk 125 crore and sponsors of the bank will have to provide the capital.

Minimum paid-up capital by a sponsor will be Tk 50 lakh, according to the guideline.

The decision comes within two week after Finance Minister AHM Mustafa Kamal in his budget speech said a Bangladesh Bank committee was working to work out strategies to broaden and accelerate financial inclusion effort.

"The committee's work on formulating the outline for setting up the digital bank is now completed," Kamal said while presenting the proposed national budget for 2023-24 fiscal year.

"In FY2023–24, we hope to be able to launch a digital bank. At the same time, we are developing a machine learning and artificial intelligence (AI)-based credit rating system. With these, it will be much easier to spot fake and anonymous borrowers and at the same time it will be considerably simpler for genuine borrowers to obtain loans," he said.