Nagad’s interim licence gets fourth extension
The Bangladesh Bank yesterday renewed the interim licence of Nagad for another six months as the Bangladesh Post Office (BPO) has failed to form a subsidiary to run the mobile financial service.
This is the fourth extension after the BPO secured the provisional approval from the central bank for the first time in March last year.
Nagad has been operating without a full-fledged licence from the central bank since its inception in 2019. Its 5.45 crore customers transact around Tk 700 crore daily.
Md Siraz Uddin, director-general of the Directorate of Posts, said the central bank had extended the tenure of the interim licence, asking the BPO to establish the subsidiary in the quickest possible time.
The BPO would try to set up the subsidiary within a month or two, he said.
The central bank has also asked it to beef up monitoring on Third Wave Technologies as well, he said.
The company is the master agent of the BPO and provides technological and logistic support to the state agency to operate the MFS.
In March last year, the BB asked banks not to provide any service to unauthorised payment or MFS providers and operators in the interest of depositors.
This forced the BPO to take the interim approval for six months as all banks had suspended transactions with Nagad.
While availing of the permission, the postal department committed to completing official procedures to get the full-fledged licence. But it has not been able to do so in the last one and a half years.
As per BB instruction, the BPO will hold a 51 per cent stake in the subsidiary.
A new company named Nagad Bangladesh Ltd will be set up to run the MFS operation, a senior official of the BPO earlier said.
Third Wave Technologies was renamed Nagad Ltd in February this year allegedly without informing the BPO.
Although Nagad is the brand name of the MFS of the BPO, Third Wave Technologies did not take any permission from the government agency to change the name, the official said.
The private firm provides service to the BPO under a revenue-sharing model. The government agency gets 51 per cent of the revenue and the private firm the rest.
Under the new model, Third Wave Technologies will hold 49 per cent of the share in the new entity.
In Bangladesh, the MFS service is run under a bank-led model. There are 15 bank-led MFS operators providing mobile wallet service.
The number of registered mobile banking accounts stood at 10.27 crore at the end of July, while active accounts numbered 4.12 crore.
Transactions through MFS providers rose 5.4 per cent year-on-year to Tk 66,387 crore in the month.
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