Bangladesh’s Open Banking Initiative
- BB aims to launch an open banking system by June 2026
- Customers can access services from various banks through fintechs
- A working committee will be formed by December to oversee implementation
- This system is expected to expedite loan processes
- Models from India and Singapore are being considered
Bangladesh is gearing up to implement an open banking system inspired by advanced nations, with the aim of boosting transparency and innovation in its financial sector.
An executive detailed that customers with accounts in one bank will be able to access services from different banks based on their performance history, all facilitated by third-party fintechs.
To illustrate, a Citi Bank account holder might find services from Eastern Bank available to them, as Eastern evaluates the customer’s financial behavior through these third-party providers.
This system enables customers to share their financial information with authorized fintechs and applications, allowing them to access loans, pay bills, analyze spending, and gather investment details from a single platform. It enhances user experience and financial insight, potentially lowering costs. Officials believe that real-time data could lead to quicker loan approvals and tailored financial plans.
“Open banking could be realized in Bangladesh with strong collaboration among banks, fintech companies, and regulators,” remarked Sharafat Ullah Khan, Head of Payment Systems at Bangladesh Bank, during the recent 5th Bangladesh FinTech Summit in Dhaka. “It’s critical for developing private credit bureaus, payment initiation services, and digital banking,” he added, addressing the theme “Open Banking: Redefining Financial Services for the Next Decade,” sponsored by Mastercard and Prime Bank.
Bangladesh Bank officials mentioned plans to release open banking guidelines and standard application programming interface (API) protocols by June 2026. A committee will start its work by December 2025 to facilitate the implementation.
Humaila Azam, managing director of Lanka-Bangla Finance, pointed out that traditional banking has been limited for quite some time. “With open banking, banks can partner with third-party fintechs to improve customer service. Investing in training and channels can help meet international standards,” he noted.
Alfan Ali, former managing director of Bank Asia, emphasized that open banking is already prevalent in regions like Europe, Australia, and Canada, where customers maintain control over their data. “Customers will be able to merge information from different banks into a single platform. Success in Bangladesh hinges on customer consent, cybersecurity, and effective data protection laws,” he stated.
Sopnendu Mohanty, co-founder and CEO of Global Finance & Technology Network, raised concerns that the term “open” might unsettle some stakeholders, highlighting that countries have various approaches to open banking.
The UK enforces open data through common APIs to promote competition, India employs state-backed account aggregators for financial inclusion, while Singapore pursues a hybrid model that is driven by market dynamics and guided by its central bank.
Global Example
In Singapore, open banking is regulated by the Monetary Authority and emphasizes collaboration between banks and fintechs from the outset. They’ve established an “API Exchange” (APIX) platform for secure customer data sharing among approved organizations.
This model is known internationally for its flexibility and innovation. On the other hand, India’s open banking operates under the Account Aggregator framework, allowing data sharing with customer consent for approved financial entities.
India’s framework is regarded as one of the most robust global open banking systems.
In Bangladesh, the central bank is in the process of drafting comprehensive policies for digital banks, payment service providers, system operators, and e-money issuers. Experts suggest that these moves could pave the way for open banking. Existing systems like the Interoperable Digital Transaction Platform and Bangla QR have already facilitated connections between banks and fintechs.
However, concerns about data privacy and security intensify as third-party access expands. There are also challenges related to integration, outdated systems, and inconsistent regulations, which could hinder progress. Weak mechanisms for transparency and consent might also erode consumer trust.
