Govt allows Nagad Digital Bank owners to hold higher-than-usual stake

Three owners of Nagad Digital Bank have been given permission to hold more shares in the proposed lender than directors are usually allowed under the country's laws.

The finance ministry has extended the exemption under a provision of the Bank Company Act 1991.

It came after the Bangladesh Bank recently wrote to the Financial Institutions Division of the finance ministry, recommending relaxation of the provision for Nagad.

On March 27, the division gave the consent, citing Section 121 of the Act that allows the central bank to relax the rules.

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However, under Section 14 (ka) of the Act, a person, organisation, company, or member of the same family can't hold more than 10 percent share, directly or indirectly.

Nagad Digital Bank has issued 12.50 crore shares among seven sponsors. Of them, three companies -- Osiris Capital Partners (USA), Blue Haven Ventures (USA) and Finclusion Ventures Pte Ltd (Singapore) -- hold more than 10 percent shares.

The rest four shareholders are Zen FinTech (USA), Trupay Technologies, Farhan Karim Khan, and Fintechtual Holdings Ltd, the only local shareholder.

Contacted, BB Spokesperson Md Mezbaul Haque told The Daily Star that Nagad got the exemption as per the Digital Bank Guidelines.

"Not only Nagad, any digital bank will get the exemption."

In October last year, Nagad became one of the two companies to receive letters of intent from the central bank to launch digital banks. Kori Digital Bank is the other company.

Tanvir A Mishuk, CEO of Nagad Digital Bank, could not be reached for comments over the phone.