BB warns banks not to serve unauthorised payment service providers

The central bank yesterday warned banks not to provide any banking services to unauthorised payment service providers and operators.

A good number of companies are carrying out businesses just like mobile financial services and opening digital wallets for clients to settle transactions without prior approval from the central bank, according to a Bangladesh Bank notice.

Such unauthorised businesses may cheat clients, which will subsequently create a lack of confidence in authorised entities.

The central bank asked banks not to open any custodian accounts in favour of unauthorised payment service providers and operators in the interest of the banking sector.

Payment service providers keep public funds in the form of custodian accounts with a bank.

A large number of people now purchase products by using digital wallets of unauthorised companies. This will create an adverse impact on the economy as a whole if their illegal activities cannot be tackled.

Banks have been asked to open custodian accounts of any organisations by verifying whether they have approval from the central bank.