Establishing a Digital Bank in Mauritius in 2024
Mauritius has quickly emerged as a prime destination for digital banking, thanks to its progressive regulatory approach and a well-developed financial ecosystem. Known for its strategic location between Africa and Asia, Mauritius serves a gateway to major markets in both regions. This advantageous position, combined with a strong emphasis on financial innovation, makes it an attractive hub for digital banking ventures. The Bank of Mauritius (BoM) has tailored its regulatory framework to accommodate digital banks, allowing financial institutions to operate entirely online while providing robust protections and requirements that ensure customer safety and operational stability.
The introduction of the Guideline for Digital Banks reflects Mauritius’s commitment to a digital-first approach in banking. This guideline outlines specific requirements and a phased licensing process to support digital banks in establishing a strong operational foundation before scaling up to full services. By addressing everything from cybersecurity and data protection to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance, the framework fosters a secure and competitive environment for digital banks.
In this article, the SALVUS Payment Services Licensing team explores the opportunities and requirements for establishing a digital bank in Mauritius, expanding on the below:
1. What is a Digital Bank in Mauritius?
2. Prudential and Regulatory Requirements
3. Other requirements
4. How can SALVUS assist you
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1. What is a Digital Bank in Mauritius?
A digital bank in Mauritius is a licensed financial institution that operates exclusively through digital and electronic channels, without physical branches. Defined under the Banking Act 2004 and guided by the Guideline for Digital Banks from the BoM, a digital bank in Mauritius delivers a full range of banking services via online platforms, mobile applications and electronic interfaces, allowing customers to access their accounts, perform transactions and manage financial products anytime, anywhere.
Key Features of Digital Banks:
- Fully digital operations
- Regulatory flexibility
- Targeted phases for development
- Focus on Technology and Cybersecurity
- Customer-centric digital experience
- Supporting financial inclusion and innovation
2. License Categories & Authorised Activities
- Capital Requirements:
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- A digital bank must meet minimum capital requirements throughout its lifecycle. Initially, a restricted digital bank is required to have a minimum paid-up capital of 200 million Mauritian rupees. Once the bank reaches full operational status, this requirement increases to 400 million rupees, ensuring it has sufficient financial resilience to operate sustainably.
- Phased Licensing Approach:
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- Digital banks in Mauritius must go through two licensing phases: the Mobilisation Period (up to 2 years) and the Transitional Period (up to 3 years). During the Mobilisation Period, a restricted digital bank is allowed to conduct limited operations as it builds its internal control, governance, and risk management frameworks. After receiving BoM approval, the bank enters the Transitional Period, where it continues to enhance these frameworks before transitioning to a fully operational digital bank.
- Risk Management and Cybersecurity:
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- Given the nature of digital banking, the Bank of Mauritius places a strong emphasis on cybersecurity and risk management. Digital banks must implement robust frameworks to manage operational, liquidity, and technology-related risks. This includes dedicated cyber risk strategies, multifactor authentication, and safeguards for digital transactions to protect customer assets and data.
- Corporate Governance and Reporting:
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- Strong governance is essential for digital banks, particularly during the restricted phases. Digital banks must maintain a well-structured board with experienced directors in digital banking and finance. Regular reporting to the BoM is mandatory, including half-yearly updates during the restricted phase, ensuring ongoing regulatory oversight and compliance with prudential standards.
Contact us at info@salvusfunds.com if you are interested in establishing a Digital Bank in Mauritius; our Payment Sevrices Licensing team is ready to answer your questions.
3. Key Aspects
- Substance Requirements: The digital bank must demonstrate economic substance by establishing a principal place of business in Mauritius, employing at least ten suitably qualified full-time staff (including key positions such as the CEO, Deputy CEO and functional heads), and incurring annual operating expenses of no less than MUR 25 million.
- Shareholding Requirements: It is essential for at least one significant shareholder of the applicant to have a proven track record in managing business in banking, financial technology, e-commerce, communications or a related field. This ensures the applicant has the expertise and credibility to operate successfully within the sector.
- Physical presence: Although digital banks in Mauritius operate exclusively through digital channels, they are still required to maintain a physical presence in the country. This includes:
- Administrative Office: Digital banks must have a principal office in Mauritius for handling administrative tasks, customer complaints, and interactions with the BoM. This office does not serve as a traditional branch but provides a base for management, compliance, and regulatory matters.
- Accessibility for On-site Inspections: The BoM requires that the physical office is accessible for regulatory inspections and audits. This office supports compliance and allows for easier oversight of the bank’s operations.
4. How can SALVUS assist you
Our Payment Services Licensing team at SALVUS specializes in guiding clients through the comprehensive licensing process for establishing a digital bank in Mauritius. With expertise tailored to the unique regulatory framework for digital banks, we start by understanding your business model and strategic objectives. This approach enables us to recommend the most suitable licensing structure and guide you through each phase of the application process.
Working closely with your team, we help gather and organise all necessary documentation to ensure your application aligns with the specific requirements set by the Bank of Mauritius. Acting as a liaison between your business and the regulatory authorities, we facilitate efficient communication, helping you navigate the two-stage licensing process—including the Mobilisation and Transitional periods—with ease. From compliance with capital requirements to implementing robust governance and cybersecurity measures, our team is dedicated to streamlining the application process, ensuring smooth and timely progress toward launching your digital banking operations in Mauritius.
Contact us at info@salvusfunds.com if you are interested in establishing a Digital Bank in Mauritius; our Payment Services Licensing team is ready to assist you.
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