The Securities and Exchange Commission of Pakistan (SECP) has allowed HugoBank Limited to commence pilot operations and approved the issuance of shares to sponsor shareholders for a fresh equity injection of Rs. 1.5 billion.

The approved capital will help HugoBank fulfill the State Bank of Pakistan’s (SBP) minimum capital requirement, a key regulatory milestone before it begins commercial banking operations.

HugoBank has already received the SBP’s in-principle approval to establish a digital retail bank in Pakistan. The bank is being developed through Starlight Holdings (Private) Limited, with sponsors committing around $60 million in capital and technology resources to build its digital banking ecosystem.

The digital bank is backed by a group of Pakistani and Singaporean investors, led by Singapore-based Atlas Consolidated, along with The Getz Group and Pakistan’s Muller & Phipps.

Unlike traditional banks that rely on physical branches, digital retail banks provide services mainly through mobile applications and online platforms. The model aims to reduce operational costs, enhance customer access, and bring more individuals and businesses into the formal financial system.

With HugoBank preparing for market entry, its launch is expected to increase competition in Pakistan’s digital financial services sector by introducing technology-based solutions including instant account opening, digital payments, fund transfers, savings products, and online lending services.