Economic Reporter :
Following widespread criticism from consumers and regulators, Nagad, the digital financial service of Bangladesh Postal Department has reduced its transaction limit in order to get approval of Bangladesh Bank.
According to Nagad app users, the operator has reduced its daily cash in transaction limit to Tk 25000 in line with the guidelines of Bangladesh Bank from its earlier limit of Tk 250,000.Accordingly, the operator has reduced its daily cash out limit to Tk 5000, which was Tk 500,000 a day.
The move is the part of Nagad effort to obtain license from Bangladesh Bank, the financial regulator of the country, a company official said noting that the operator is conducting its business with a temporary license from Bangladesh Bank.
“Our management has cut the limit of transactions in line with the guidelines of Bangladesh Bank and the process for obtaining the central bank’s approval is going on full swing”, the official said on condition of anonymity.
The move to cut transaction limit of Nagad has come after refusal of most commercial banks to share cash flow with any unregulated digital financial service operator, which put tremendous pressure on Nagad business in recent time and forced it to submit application for regulatory approval.
A Bangladesh Bank official said the central bank will definitely consider Nagad’s application favourably as it has brought down its transaction limit in line with our guideline, which is necessary to keep a level playing field and restore a conducive regulatory environment in the countr’s financial landscape.
Nagad, operated by a private technology firm under the Postal Act faced widespread criticisms from different corners since its inception for its higher limit of transactions from the regulatory price structure followed by other MFS which may trigger risks of money laundering and destablise the conducive environment of the country’s fast-growing mobile financial service industry.
The big concern was that Nagad allowed a person to transact Tk 2.50 lakh a day- nearly 9 times higher than the central bank’s set limit for other similar service operators. Higher amount of transactions through such an unregulated digital service channel may trigger money laundering and distort the level playing field to halt the growth pace.
Bangladesh Financial Intelligence Unit (BFIU)has requested the Bangladesh Post Office to cut down transaction limit in case of person to person dealing through its digital service-Nagad. Following the concern of Bangladesh Bank, Ministry of Finance requested the Post and Telecom Ministry to place its digital service under the central bank’s supervision.
In a market-driven economy, all the players deserve a level playing field. Mobile banking is a regulated field, so all players involved in similar business should follow the same guidelines. Nagad shouldn’t be an exception, he said.
Following widespread criticism from consumers and regulators, Nagad, the digital financial service of Bangladesh Postal Department has reduced its transaction limit in order to get approval of Bangladesh Bank.
According to Nagad app users, the operator has reduced its daily cash in transaction limit to Tk 25000 in line with the guidelines of Bangladesh Bank from its earlier limit of Tk 250,000.Accordingly, the operator has reduced its daily cash out limit to Tk 5000, which was Tk 500,000 a day.
The move is the part of Nagad effort to obtain license from Bangladesh Bank, the financial regulator of the country, a company official said noting that the operator is conducting its business with a temporary license from Bangladesh Bank.
“Our management has cut the limit of transactions in line with the guidelines of Bangladesh Bank and the process for obtaining the central bank’s approval is going on full swing”, the official said on condition of anonymity.
The move to cut transaction limit of Nagad has come after refusal of most commercial banks to share cash flow with any unregulated digital financial service operator, which put tremendous pressure on Nagad business in recent time and forced it to submit application for regulatory approval.
A Bangladesh Bank official said the central bank will definitely consider Nagad’s application favourably as it has brought down its transaction limit in line with our guideline, which is necessary to keep a level playing field and restore a conducive regulatory environment in the countr’s financial landscape.
Nagad, operated by a private technology firm under the Postal Act faced widespread criticisms from different corners since its inception for its higher limit of transactions from the regulatory price structure followed by other MFS which may trigger risks of money laundering and destablise the conducive environment of the country’s fast-growing mobile financial service industry.
The big concern was that Nagad allowed a person to transact Tk 2.50 lakh a day- nearly 9 times higher than the central bank’s set limit for other similar service operators. Higher amount of transactions through such an unregulated digital service channel may trigger money laundering and distort the level playing field to halt the growth pace.
Bangladesh Financial Intelligence Unit (BFIU)has requested the Bangladesh Post Office to cut down transaction limit in case of person to person dealing through its digital service-Nagad. Following the concern of Bangladesh Bank, Ministry of Finance requested the Post and Telecom Ministry to place its digital service under the central bank’s supervision.
In a market-driven economy, all the players deserve a level playing field. Mobile banking is a regulated field, so all players involved in similar business should follow the same guidelines. Nagad shouldn’t be an exception, he said.
