Dhaka Wednesday, September 28, 2022

Banks asked not to open Nagad account without BB permission


Published:
2021-09-06 20:43:56 BdST

Update:
2022-09-28 11:38:36 BdST

The Bangladesh Bank has instructed all commercial banks not to open the trust-cum-settlement account under the name of Nagad Ltd without the permission from the Bangladesh Post Office and the central bank.

The trust-cum-settlement account refers to a custody account where the legal tender shall be stored against the issuance of e-money by a payment service provider.

The central bank sent a letter to all commercial banks in this regard on Monday. The Business Post obtained a copy of the letter.

The mobile financial service provider – Nagad -- was being operated by Third Wave Technologies Limited from its inception on March 26 of 2019. Recently, the company has changed its name to Nagad Ltd.

A high official of the central bank said, “Officially, we have not been informed that the company had changed its name to Nagad Ltd, which has prompted the central bank to issue the directive.”

“We instructed banks not to open any trust-cum-settlement account under the name of Nagad Ltd without permission from the Bangladesh Post Office and the central bank as the mobile financial service provider has no licence till now,” he pointed out.

Nagad is not known to have belonged to the Bangladesh Post Office, but the fast-growing MFS provider has introduced itself as a digital financial services arm of the Bangladesh Post Office.

Nagad is now in operation after obtaining from the Bangladesh Bank a temporary licence, which will expire this September.

Contacted, Bangladesh Post Office Director General Md Siraz Uddin told The Business Post Nagad is now operating the trust-cum-settlement account under its old identity while the Bangladesh Post Office has no ability to operate such account right now.

He posited that an individual company formation process is underway incorporating the Bangladesh Post Office.

“Once the process is completed, the account will be maintained by Nagad that will turn out to be a digital financial services arm of the Bangladesh Post Office,” added the high-up.

Asked about it, Nagad Managing Director Tanvir A Mishuk termed the change of company name and the opening of trust-cum-settlement account an ongoing process.

Such processes will be completed maintaining regulatory requirements, he added.

Currently, Nagad has 5.40 crore registered customers and its average daily transaction is Tk 700 crore.



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