Govt takes over Nagad

The Bangladesh Post Office (BPO) owns Nagad and it has now been taken over as a government organisation, Bangladesh Bank Governor Ahsan H Mansur said yesterday.
“Since it was shown as a postal department organisation, and the post office has a large share in it, the government has taken control of it on behalf of the BPO,” he said at a press briefing at the central bank headquarters.
He added that the process of the digital bank’s licensing would be reviewed.
“Those who received the licence, if they are eligible upon review, will retain it,” Mansur said.
The central bank governor’s comments came a day after the BB appointed an administrator to Nagad amid allegations of irregularities in the mobile financial service (MFS) provider’s operations and dealings.
Earlier in the day, during a separate press conference at Nagad’s headquarters in Dhaka, its newly-appointed administrator Badiuzzaman Dider said the current board and the post of CEO had been abolished through the appointment of an administrator.
Nagad, without any MFS licence, has been operating under the postal department with approval from the BB, he said.
“There are some rumours about Nagad, but such propaganda shouldn’t impact it. If Nagad is affected or damaged, it will negatively impact the financial system,” he said.
Entering the market in March 2019 as the digital financial service provider of the BPO, Nagad,  with the blessings of the former Awami League government, has been running on a temporary licence from the BB.
In June, the central bank extended the tenure of its temporary licence to operate as an MFS for the seventh time.
The licence will expire in June next year.
BB officials said they heard there was a revenue-sharing agreement with a company named Third Wave Technologies, which was later renamed as ‘Nagad Ltd’.
Mansur said Third Wave Technologies was only appointed as an outsourcing firm by the BPO.
Nagad applied for a licence of a non-bank financial institution (NBFI) after the central bank brought changes in regulations allowing NBFIs to run MFS.
It received the licence in 2023, naming itself ‘Nagad Finance’.
It surrendered the NBFI licence later and applied for a digital bank licence in line with guidelines issued by the central bank.
The BB then issued the licence of the country’s first digital bank – Nagad Digital Bank PLC.
At the press briefing yesterday, the BB governor said they would conduct an audit on Nagad.
“If Nagad is restructured and can stand on its own feet, it may receive a licence in the future,” Mansur said.
According to him, the intervention in Nagad was made in the interest of the public because the company holds deposits of the people.
“There are questions about the ownership of Nagad. It does not have full legal certification and has been operating on the basis of an interim approval,” he said.
He added that Nagad also created more money than they had in deposits. “This should not have happened, but it was happening.”
Mansur said the immediate purpose of this move is to safeguard customers’ interests and the long-term aim is to save Nagad from being abolished.
“We want Nagad to become a transparent, compliant, and internationally recognised organisation like bKash,” he said, “Our purpose is to increase competition in the MFS sector, but not through unfair competition.”
The BB governor said Nagad was given many favourable terms in the past, including a provision for all government disbursements to be made through its services.
“This was not a market-based decision; it was a biased decision. There should be a level playing field. There will be no immediate operational changes in Nagad.”
He said Professor Yunus wishes to transform it into an international standard organisation.
   “Digital payment is the main goal of MFS, and this will be ensured through competition, without affecting the customers’ money. The current commission, fees and discounts in Nagad will remain unchanged,” he said.