In a landmark move for Pakistan’s banking sector, the Governor of the State Bank of Pakistan (SBP) has awarded Mashreq Bank Pakistan Limited (MBPL) the first restricted pilot license to operate as a digital retail bank.
“The Governor, State Bank of Pakistan [Jameel Ahmad] awarded the first restricted license for pilot operations to Mashreq Bank Pakistan Limited in a special meeting held with the Board and senior management of MBPL,” SBP said in a statement on February 21, 2025.
The license, presented in a special meeting attended by the Board and senior management of MBPL, alongside SBP’s Deputy Governor and senior executives, marks a significant milestone in the country’s ongoing digital banking evolution.
In the meeting, the Governor of SBP shared his high expectations for Mashreq Bank Pakistan to utilize cutting-edge technologies like artificial intelligence (AI) and cloud computing to offer innovative, seamless, and personalized banking experiences. He emphasized the importance of MBPL adhering to high regulatory standards, maintaining operational excellence, and fostering competition within the financial sector.
Mashreq Bank’s digital vision
MBPL, a wholly owned subsidiary of Mashreq Bank PSC (UAE), is set to bring its wealth of experience in innovation, customer-centricity, and agility to the Pakistani market. With a strong regional and global presence, including offices across Europe, Asia, Africa, and the United States, Mashreq Bank’s proven track record positions it as a key player to drive digital transformation in Pakistan’s banking landscape.
The award of this restricted license for pilot operations follows SBP’s earlier approval of Pakistan’s first Digital Retail Bank (DRB) license to a microfinance bank for commercial operations earlier this year. This further strengthens the growing momentum towards digital banking in Pakistan.
A Step Toward Digital Transformation
The introduction of digital banking licenses in Pakistan is part of SBP’s broader vision for the future of banking in the country. In 2022, SBP introduced a comprehensive regulatory framework to license full-fledged digital banks, allowing both fintech startups and traditional banks to operate exclusively through digital channels. Under this framework, SBP is offering two types of licenses: Digital Retail Banks (DRBs) and Digital Full Banks (DFBs).
SBP’s cohort-based approach for issuing these licenses has generated significant interest, with 20 major financial players applying for the opportunity. Following a rigorous evaluation process, SBP issued No-Objection Certificates (NOCs) to five institutions, including MBPL. Other recipients of these licenses include Easypaisa Bank Limited, Raqami Islamic Digital Bank Limited (RIDBL), HugoBank Limited, and KT Bank Limited.
Digital Banks: Empowering Underserved Communities
As digital banking grows in Pakistan, SBP envisions these institutions playing a pivotal role in delivering affordable financial services to underserved and unbanked populations. With their focus on technological innovation and seamless customer service, digital banks are expected to address key gaps in financial inclusion while ensuring strong regulatory compliance.
The rise of digital banks will pave the way for a future-ready financial system that is adaptable, customer-centric, and technologically advanced. As the pilot operations for Mashreq Bank Pakistan begin, the path is set for a transformation in how banking services are delivered to Pakistani consumers.
SBP’s progressive approach to digital banking aims to create a more inclusive, accessible, and secure financial system for all Pakistanis, positioning digital banking as a cornerstone of the country’s economic development.